Use the information below to answer questions .Stock of material 1/1..............₦10 000 Purchase of raw material...........₦160 000 Manufacturing wages......
Question 1 Report
Use the information below to answer questions .Stock of material 1/1..............₦10 000
Purchase of raw material...........₦160 000
Manufacturing wages................₦420 000
Royalties..........................₦3 000
Stock of raw materials 31/12.......₦14 000What is the cost of raw materials consumed?
Answer Details
To calculate the cost of raw materials consumed, we need to use the following formula:
Cost of Raw Materials Consumed = Beginning Inventory of Raw Materials + Purchases of Raw Materials - Ending Inventory of Raw Materials
Using the information provided, we can calculate the cost of raw materials consumed as follows:
- Beginning inventory of raw materials on 1/1 = ₦10,000
- Purchases of raw materials during the year = ₦160,000
- Ending inventory of raw materials on 31/12 = ₦14,000
Therefore, the cost of raw materials consumed is:
Cost of Raw Materials Consumed = ₦10,000 + ₦160,000 - ₦14,000 = ₦156,000
Therefore, the cost of raw materials consumed is ₦156,000. Option (D) ₦156,000 is the correct answer.
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