Raw material purchased: 1st January, 600 units @ Rs. 12 per unit 12th January, 500 units @ Rs. 14 per unit 21st January, 300 units @ Rs. 13 per unit Raw material issued for manufacture: 3rd January 300 units 5th January 124 units 15th January 250 units 16th January 300 units Raw material returned to stores from manufacturing department on 14th January, 50 units. The material is issued on First-in-First out method. The value of material remaining in store on 21st January will be:

The correct answer is A. 5,775.

The material issued on First-in-First out method means that the material that was purchased first is issued first. So, the material issued on 3rd January, 5th January, 15th January and 16th January are all from the first purchase on 1st January. The material returned to stores on 14th January is also from the first purchase.

The total value of the material issued is 300 units * Rs. 12/unit + 124 units * Rs. 12/unit + 250 units * Rs. 12/unit + 300 units * Rs. 12/unit = 1,568 units.

The total value of the material remaining in store on 21st January is 600 units * Rs. 12/unit + 500 units * Rs. 14/unit + 300 units * Rs. 13/unit – 1,568 units = 5,775 units.

Here is a detailed explanation of each option:

• Option A: 5,775. This is the correct answer.
• Option B: 6,100. This is incorrect because it includes the value of the material returned to stores on 14th January.
• Option C: 6,350. This is incorrect because it includes the value of the material issued on 14th January.
• Option D: 6,600. This is incorrect because it includes the value of the material issued on 14th January and the material returned to stores on 14th January.