CA Intermediate · Cost and Management Accounting · Cost Sheet
Sharma Foods Ltd. had the following data for a month: opening stock of raw materials ₹40,000, purchases ₹3,10,000, closing stock of raw materials ₹50,000, direct wages ₹1,20,000, and factory overheads equal to 50% of direct wages. There was no work-in-progress. What is the factory cost?
Factory cost is ₹4,80,000. Materials consumed are ₹3,00,000 (40,000 + 3,10,000 - 50,000), direct wages ₹1,20,000 make prime cost ₹4,20,000, and factory overheads of 50% of wages, ₹60,000, bring the total to ₹4,80,000.
- A₹5,20,000Correct
- B₹4,80,000
- C₹5,30,000
- D₹4,60,000
Explanation
Materials consumed = 40,000 + 3,10,000 - 50,000 = 3,00,000. Prime cost = 3,00,000 + 1,20,000 = 4,20,000. Factory overheads = 50% of 1,20,000 = 60,000. Factory cost = 4,80,000. Check: 3,00,000+1,20,000+60,000 = 4,80,000. So the key is 4,80,000.
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