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raw material consumed

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23 May 2011 MY COMPANY IS CALCULATING RAW MATERIAL CONSUMED BY USING THE FOLLOWING FORMULA:
OPENING WIP XX
ADD: RAW MATERIAL ISSUED XX
LESS: CLOSING WIP XX


IS THE ABOVE FORMULA CORRECT???

23 May 2011 No the above formula is not correct.

It should be---

Op. Stock of Raw Materials+Purchase of Raw Materials-Cl. Stock of Raw Materials.

23 May 2011 so how will i include WIP in the above formula??




23 May 2011 WIP has no relation with raw material consumed. You will just have to consider Op Stock of Raw Materials, Purchase and Cl. Stock of raw materials. Once Raw Materials are issued whether the same has been converted in finished goods or WIP it is not a matter. Just apply this formula---

Raw Mat Consumed=Op. Stock of Raw Materials+Purchase of Raw Materials-Cl. Stock of Raw Materials.

23 May 2011 but sir this formula is being used in my company from a very very long time by an old ca.

further how can we ignore wip???

23 May 2011 https://www.caclubindia.com/experts/finish-goods-raw-material-consupmtion-formula-363895.asp

Also see reply from above link.

24 May 2011 ok sir i have seen that but i want to know about the calculation of WIP

05 June 2011 The formula given is incomplete please bifurcate WIP into Material in process & Expenses in process and then use you will get the result




05 June 2011 i didnt understand it pankaj



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