Use the information to answer the given question. \(\begin{array}{c|c} & D\\ \text{Opening stock: raw materials} & 10,000\\ \text{work-in-progress} & 16,000...
Question 1 Report
Use the information to answer the given question.
\(\begin{array}{c|c} & D\\ \text{Opening stock: raw materials} & 10,000\\ \text{work-in-progress} & 16,000\\ \text{Purchases of raw materials} & 95,000\\ \text{Direct labour wages paid} & 13,500\\ \text{Royalties paid} & 6,200\\ \text{Accrued wages} & 2,800\\ \text{Closing stock: raw materials} & 7,500\\ \text{work in progress} & 8,500\\ \text{Manufacturing overhead} & 10,000\end{array}\)
Cost of raw materials consumed is
\(\begin{array}{c|c} & D\\ \text{Opening stock: raw materials} & 10,000\\ \text{work-in-progress} & 16,000\\ \text{Purchases of raw materials} & 95,000\\ \text{Direct labour wages paid} & 13,500\\ \text{Royalties paid} & 6,200\\ \text{Accrued wages} & 2,800\\ \text{Closing stock: raw materials} & 7,500\\ \text{work in progress} & 8,500\\ \text{Manufacturing overhead} & 10,000\end{array}\)
Cost of raw materials consumed is
Answer Details
To calculate the cost of raw materials consumed, we need to use the formula:
Cost of raw materials consumed = Opening stock of raw materials + Purchases of raw materials - Closing stock of raw materials
Plugging in the given values, we get:
Cost of raw materials consumed = 10,000 + 95,000 - 7,500
= 97,500
Therefore, the cost of raw materials consumed is D98,000 (closest option).
Explanation: The opening stock of raw materials and purchases of raw materials are added together to get the total raw materials available for use. Then, the closing stock of raw materials is subtracted from the total raw materials available to determine the raw materials consumed during the period.
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