Costing Compiler Q22 - MAY 2021 RTP

Costing

In the given question, while it is logical to take annual demand for raw material after deducting the stock of raw material as we are calculating order quantity. However while calculating Avg consumption should we not take the whole requirement of raw material for the production including those in opening stock? For Calculating max or min consumption, does the source of raw material (opening stock or purchased during the year) matter? Kindly explain. thanks

Aswin Chandar

CA Final

★ 40K+

11-Aug-24 11:59

329

Answers (3)

Best Answer

Logically what you are saying is correct. As a precaution while solving any question like this where there is confusion between suggested answer and logic give your assumption by way of note and also mention the other possibility.

Pranay Mehta

Faculty

12-Aug-24 11:54

Pranay Mehta Faculty

Thanks a lot sir. Is the suggested answer correct by any assumption or logic. Please clarify. Thanks

Thread Starter

Aswin Chandar

CA Final

★ 40K+

13-Aug-24 10:42

While the answer is little illogical you need to be aware that at some place a different working was done by the icai

Pranay Mehta

Faculty

19-Aug-24 09:39