“Process B had no opening inventory. 13,500 units of raw material were transferred in at Rs 4.50 per unit. Additional material at Rs1.25per unit was added in process. Labour and overheads were Rs 6.25 per completed unit and Rs 2.50 per unit incomplete. If 11,750completed units were transferred out, what was the closing inventory in Process B?”

The correct answer is A. Rs 6562.50.

The cost of the materials transferred in is 13,500 units x Rs 4.50 per unit = Rs 60750.
The cost of the additional materials added in process is 13,500 units x Rs 1.25 per unit = Rs 16875.
The cost of the labour and overheads is 11,750 units x Rs 6.25 per unit + 1750 units x Rs 2.50 per unit = Rs 83125.
The total cost of the units transferred out is Rs 60750 + Rs 16875 + Rs 83125 = Rs 160750.
The cost of the units in the closing inventory is 13,500 units x Rs 4.50 per unit + 1750 units x Rs 1.25 per unit + 1750 units x Rs 2.50 per unit = Rs 6562.50.

Option B is incorrect because it is the cost of the units transferred out.
Option C is incorrect because it is the cost of the materials transferred in plus the cost of the additional materials added in process.
Option D is incorrect because it is the total cost of the units transferred out plus the cost of the units in the closing inventory.