Plz explain this line...*It should be noted that change in material is not shown as it is already included in the raw material consumed in p/l a/c.
Dear Student
This line simply states that change in material is already included in the total raw material consumed, we can understand it as follows:
Material consumed simply means total material used in the whole period. Its formula is
Raw material consumed = Opening material + Purchase of raw material - Closing Stock of raw material.
or
Raw material consumed = Opening material - Closing material + Purchase of Raw material
or
Raw material consumed = Change in material + Purchase of Raw material
Therefore as the change in material is already included in raw material consumed it is not separately shown, we can clearly understand it from above formula, also if it would be separately shown then it shall result in an error as the opening - Closing (Change) would be accounted twice.
Hope this helps
Regards
This line simply states that change in material is already included in the total raw material consumed, we can understand it as follows:
Material consumed simply means total material used in the whole period. Its formula is
Raw material consumed = Opening material + Purchase of raw material - Closing Stock of raw material.
or
Raw material consumed = Opening material - Closing material + Purchase of Raw material
or
Raw material consumed = Change in material + Purchase of Raw material
Therefore as the change in material is already included in raw material consumed it is not separately shown, we can clearly understand it from above formula, also if it would be separately shown then it shall result in an error as the opening - Closing (Change) would be accounted twice.
Hope this helps
Regards