Concept:The cost of raw materials used means the value of raw materials actually consumed in production during the period.
It is found by adjusting purchases with the opening and closing stocks of raw materials.
Explanation:The total raw materials available for use is the opening stock plus purchases made during the period.
Materials available
= Opening stock
+ Purchases.
Opening stock
= #75,000, and purchases
= #330,000.
Therefore, materials available
= #75,000+#330,000=#405,000.
From this total, subtract the closing stock of raw materials because those materials were not used.
Raw materials used
= #405,000−#80,000=#325,000.
Direct wages and carriage of raw materials are not included in this calculation because only the cost of raw materials consumed is required.
Answer:The cost of raw materials used is
#325,000, so the correct option is C.