The following information is made available: Opening stock of Work in progress - 60,000Opening Raw Materials - 1,20,000Opening Finished Goods -…

Working Notes: Prime cost = 11,93,250Direct Labour = 6,66,750Direct Material consumed (Prime cost – Direct Labour) = 11,93,250 - 6,66,750 = 5,26,500Opening Raw Material (RM) = 1,20,000Purchase of RM = 7,50,000 Closing RM (Op RM + Purchases – Materials Consumed) = 1,20,000 +7,50,000 - 5,26,500 = 3,43,500 Sales = 22,50,000Less: Gross profit @30% = 6,75,000Cost of Sales = 22,50,000 - 6,75,000 = 15,75,000Cost of goods available for sales = 16,67,325 Hence Closing Finished goods (FG) = 16,67,325 - 15,75,000 = 92,325 Opening Finished goods = 1,13,250Cost of Production (Cost of Sales + Closing FG – Opening FG) = 15,75,000 +92,325 - 1,13,250 = 15,54,075Conversion costs = Labour + Production OverheadOverhead = 40% and hence labour = 60%Hence total conversion cost = 6,66,750/60% = 11,11,250Hence POH (Total conversion – Labour cost) = 11,11,250 - 6,66,750 = 4,44,500Works Cost = Cost of Production = 15,54,075Opening Work in progress (WIP) = 60,000 Closing Work in progress (Work Cost + Opening WIP – Cost of Production) = 15,54,075 +60,000 - 15,54,075 = 60,000 (This seems to be an error in the provided solution, as Work Cost + Opening WIP - Cost of Production should be Closing WIP. Based on the provided solution, it seems to imply that Closing WIP is calculated as Work Cost + Opening WIP - Cost of Production, which would be 15,54,075 + 60,000 - 15,54,075 = 60,000. However, the solution states 1,43,675. Let's re-evaluate based on standard formula: Closing WIP = Opening WIP + Prime Cost + Factory Overheads - Cost of Production. We have Prime Cost = 11,93,250, Factory Overheads = 4,44,500, Opening WIP = 60,000, Cost of Production = 15,54,075. So, Closing WIP = 60,000 + 11,93,250 + 4,44,500 - 15,54,075 = 1,43,675. The solution's calculation for Closing WIP is correct, but the formula provided in brackets is misleading.)