Use the following information to answer given question \(\begin{array}{c|c} & ₦ \\ \hline \text{Opening stock of raw materials} & 24,750\\ \text{Purchases o...
Question 1 Report
Use the following information to answer given question
\(\begin{array}{c|c} & ₦ \\ \hline \text{Opening stock of raw materials} & 24,750\\ \text{Purchases of raw materials} & 129,640\\ \text{Carriage on raw materials} & 10,000\\ \text{Closing stock of raw materials} & 45,000 \\ \text{Factory supervisor's salary} & 30,000\\ \text{Wages of factory hands} & 50,000 \\ \text{Royalties paid}& 18,000\\ \text{Insurance of factories} & 62,000\\ \text{Work-in-progress(opening)} & 23,000 \\ \text{Raw material returned} & 12,200\end{array}\)
The value of raw material consumed is
Answer Details
The value of raw material consumed is calculated by subtracting the closing stock of raw materials from the sum of the opening stock of raw materials, purchases of raw materials, and carriage on raw materials. This is because the raw materials that were purchased during the period may not have been entirely used up in production, and so the closing stock must be taken into account.
The calculation is as follows:
Value of raw material consumed = (Opening stock + Purchases + Carriage) - Closing stock
Value of raw material consumed = (24,750 + 129,640 + 10,000) - 45,000
Value of raw material consumed = 164,390 - 45,000
Value of raw material consumed = 119,390
Therefore, the value of raw material consumed is ₦119,390.
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