Multiple choice

Stocks and raw material- 30,000 Work in progress- 20,000 Finished goods- 10,000 Cost of goods produced/sold- 400,000 Purchase/consumption of raw material- 200,000

Compute the duration of operating cycle assuming the days to be 360.

  1. Raw material - 54 Work in progress - 18 days Finished goods - 9 days

  2. Raw material - 54 days Work in progress - 18 days Finished goods - 19 days

  3. Raw material - 50 days Work in progress - 20 days Finished goods - 9 days

  4. Raw material - 56 days Work in progress - 34 days Finished goods - 23 days

  5. None of these
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A Correct answer
Explanation

RM- 30,000/ 200,000 * 360 = 54 days WIP- 20,000/ 400,000 * 360 = 18 days FG- 10,000/ 400,000 * 360 = 9 days

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