Question

Calculate Cost of Materials Consumed from the following:

Opening Inventory of Materials ₹2,50,000; Finished Goods ₹1,00,000; Closing Inventory of Materials ₹2,25,000; Finished Goods ₹75,000; Raw Material purchased during the year ₹15,00,000.

Answer 1

Cost of Material Consumed = Opening Inventory of Materials + Purchase of Materials - Closing Inventory of Materials 

= 250000 + 1500000 - 225000 = 1525000

∴ Cost of Material Consumed is Rs 1525000

Note: Opening Inventory of Finished Goods and Closing Inventory of Finished Goods will not be considered as these are shown under Change in Inventory of Finished Goods.