Question

From the following details, calculate the missing figures:
Opening stock = $1,50,000$
Manufacturing expenses = _________
Direct expenses = $Rs.20,000$
Selling and distribution expenses = $Rs.23,000$
Administrative expenses = $Rs.12,000$
Sales $Rs.2,80,000$
Gross Profit 25% on sales

• A. $Rs.35,000$
• B. $Rs.40,000$
• C. $Rs.45,000$
• D. $Rs.50,000$

Answer 1

The correct option is B $Rs.40,000$

Manufacturing expenses include only direct expenses.

Selling & distribution expenses and Admin expenses are financial expenses and not direct expenses.

Therefore, manufacturing expenses= Sales-Opening Stock-Direct Expenses (others)-Gross Profit:

Rs.2,80,000-Rs.1,50,000-Rs.20,000-Rs.70,000 [2,80,000 X 25%]

=Rs.40,000