CA Intermediate · Cost and Management Accounting · Cost Sheet
Sharma Plastics reports: opening raw materials ₹40,000; purchases ₹3,20,000; carriage inward ₹10,000; closing raw materials ₹50,000; direct wages ₹1,80,000; factory overheads ₹90,000; opening work-in-process ₹30,000; closing work-in-process ₹20,000. What is the factory (works) cost?
Factory cost is ₹6,00,000. Materials consumed are ₹3,20,000 after carriage inward and stock changes; adding wages gives prime cost ₹5,00,000, factory overheads make ₹5,90,000, and the net WIP increase in opening over closing of ₹10,000 is added to reach ₹6,00,000.
- A₹5,90,000
- B₹6,00,000Correct
- C₹6,10,000
- D₹5,70,000
Explanation
Materials consumed = 40,000 + 3,20,000 + 10,000 - 50,000 = 3,20,000. Prime cost = 3,20,000 + 1,80,000 = 5,00,000. Add factory overheads 90,000 = 5,90,000. Add opening WIP 30,000 and deduct closing WIP 20,000: 5,90,000 + 10,000 = 6,00,000. Option ₹5,90,000 ignores the WIP adjustment.
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