Problem: 1 X company intend to manufacture 100,000 units of product M. Each unit of product M requires one unit of the three types of raw materials namely A,B and C. i. Material A is in regular use of the company and the stocks are replaced as and when exhausted. 11. 111. Material B is not in regular use of the company but as a result of overbuying in an earlier contract, the company at present holds a stock of 60,000 units. Material C is used only in product M and hence the company has to purchase the same as per the requirement of production of the product. The data relating to the three items of raw materials are as under: Raw Current materials stock(units) 100,000 60,000 Cost per unit of Raw material Current Replacement Original cost(RO) 2.000 3.500 (RO) 2.500 3.000 6.000 Current resale cost(RO) 1.750 1.000 5.000 A B C nil nil You are required to calculate the cost of materials used in manufacture of 100,000 units of product M.

Problem: 1 X company intend to manufacture 100,000 units of product M. Each unit of product M requires one unit of the three types of raw materials namely A,B and C. i. Material A is in regular use of the company and the stocks are replaced as and when exhausted. 11. 111. Material B is not in regular use of the company but as a result of overbuying in an earlier contract, the company at present holds a stock of 60,000 units. Material C is used only in product M and hence the company has to purchase the same as per the requirement of production of the product. The data relating to the three items of raw materials are as under: Raw Current materials stock(units) 100,000 60,000 Cost per unit of Raw material Current Replacement Original cost(RO) 2.000 3.500 (RO) 2.500 3.000 6.000 Current resale cost(RO) 1.750 1.000 5.000 A B C nil nil You are required to calculate the cost of materials used in manufacture of 100,000 units of product M.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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