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Opening stock of material is 40,000, purchases are 2,10,000 and closing stock is 30,000. Material consumed is
A2,50,000
B2,20,000
C2,80,000
D1,80,000
Answer & Solution
Correct answer: B. 2,20,000
1. Direct materials consumed = opening stock plus purchases less closing stock.
2. Opening plus purchases = 40,000 + 2,10,000 = 2,50,000.
3. Deduct closing stock: 2,50,000 - 30,000 = 2,20,000.
4. Adding closing stock instead of deducting gives 2,80,000, which is the usual slip.
_Source: ICAI Cost and Management Accounting Ch6 'Cost Sheet', section 6.3.1(i)_
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