CAF-5 · Chapter 17 · Question 20 of 20
(Cost Flow & Interlocking Ledgers) In an interlocking cost ledger system, the opening balance of Raw Materials was Rs. 20,000. During the month, Rs. 100,000 of raw materials were purchased. At month-end, physical inventory was Rs. 15,000. During the month, Rs. 10,000 was issued as indirect materials to the factory floor, and a fire destroyed Rs. 5,000 worth of materials (abnormal loss). What is the total debit to the Work in Process (WIP) Control account for direct materials issued?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 90,000
Explanation
Total raw materials removed from the store = Opening (20k) + Purchases (100k) - Closing (15k) = Rs. 105,000. Out of this 105k, Rs. 10,000 goes to Production Overheads (Indirect) and Rs. 5,000 goes to Abnormal Loss. Direct materials charged to WIP = Total (105k) - Indirect (10k) - Abnormal (5k) = Rs. 90,000.
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