Question

Opening stock of raw material $+$ Purchases of raw material $-$ Closing stock of raw material $=$ _____________.

• A. Cost of goods sold
• B. Cost of materials consumed
• C. Cost sales
• D. Prime cost

Answer 1

The correct option is B Cost of materials consumed

Cost of material consumed meaning the cost of raw material which is incurred for production of goods.

This can be represented as follows:

Opening Stock of Raw Material 150000

Add: Purchases of Raw Material 250000

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400000

Less: Closing stock of Raw Material 100000

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Cost of material consumed 300000

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