The correct answer is: C. Rs. 27,000
Manufacturing cost is the cost of converting raw materials into finished goods. It includes the cost of direct materials, direct labor, and manufacturing overhead.
In this question, we are given the following information:
- Opening stock = Rs. 5,000
- Closing stock = Rs. 7,000
- Purchases = Rs. 10,000
- Manufacturing expenses = Rs. 20,000
- Loss of materials by fire = Rs. 1,000
To calculate the manufacturing cost, we first need to calculate the cost of goods available for sale. This is done by adding the opening stock to the purchases and then subtracting the closing stock.
Cost of goods available for sale = Opening stock + Purchases – Closing stock
= Rs. 5,000 + Rs. 10,000 – Rs. 7,000
= Rs. 12,000
The manufacturing cost is then calculated by adding the cost of goods available for sale to the manufacturing expenses and then subtracting the loss of materials by fire.
Manufacturing cost = Cost of goods available for sale + Manufacturing expenses – Loss of materials by fire
= Rs. 12,000 + Rs. 20,000 – Rs. 1,000
= Rs. 27,000
Therefore, the manufacturing cost is Rs. 27,000.