CA Inter P4 · Chapter 6 · Question 1 of 9
From the following, calculate the prime cost: opening stock of raw material ₹40,000; purchases of raw material ₹3,20,000; carriage inward ₹8,000; closing stock of raw material ₹52,000; direct wages ₹1,85,000; direct expenses ₹24,000.
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) ₹5,25,000
Explanation
Materials consumed = ₹40,000 + ₹3,20,000 + ₹8,000 - ₹52,000 = ₹3,16,000. Prime cost = materials consumed + direct wages + direct expenses = ₹3,16,000 + ₹1,85,000 + ₹24,000 = ₹5,25,000. Carriage inward is part of the cost of material.
More Cost Sheet MCQs
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- Q5Which of the following items is excluded from the cost sheet?
- Q6Cost of sales of a product is ₹8,40,000. The company wants to earn a profit of 20% on sales. The selling price should be:
- Q7Sale proceeds of normal scrap arising in the factory are generally treated in the cost sheet as: