CA Inter P4 · Chapter 6 · Question 2 of 9
Prime cost is ₹5,25,000 and factory overheads are ₹1,40,000. Opening work-in-progress is ₹30,000 and closing work-in-progress is ₹45,000. The works (factory) cost is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) ₹6,50,000
Explanation
Gross works cost = prime cost + factory overheads = ₹5,25,000 + ₹1,40,000 = ₹6,65,000. Works cost = gross works cost + opening WIP - closing WIP = ₹6,65,000 + ₹30,000 - ₹45,000 = ₹6,50,000.
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