The goods which are used in the production of finished goods are:

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → Capital items

Note: The given answer is as per the official NTA Answer Key. For this question, Option (1) could also be a possible answer, as explained below.

Option (1) Material and parts — Should also be correct, though not the answer given by NTA. These goods go into the product itself, such as glass, iron, tyres and batteries. They “enter the manufacturer’s products completely”, so they too are used in the production of finished goods if the words are read literally. They become part of the finished product, while capital items only help to make it.
Option (2) Operating supplies — Incorrect. These are short-lasting goods used to run the business, such as lubricant, computer stationery and writing paper.
Option (3) Capital items — Correct. Capital items are goods used in the production of finished goods. They include installations, such as elevators and mainframe computers, and equipment, such as hand tools and fax machines.
Option (4) Repair items — Incorrect. These are short-lasting maintenance goods, such as paint and nails. They belong to supplies.

Note: This question is taken directly from NCERT: “used in the production of finished goods” is the book’s own description of capital items, word for word.

NCERT (2026-27 Edition): “Classification The industrial goods are classified into the following major categories:
(i) Materials and Parts: These include goods that enter the manufacture’s products completely. …”

“(ii) Capital Items: These are such goods that are used in the production of finished goods. These include: (a) installations like elevators, mainframe Computers, and (b) equipments like Hand Tools, Personal Computer, Fax Machines, etc.
(iii) Supplies and Business Services: These are short lasting goods and services that facilitate developing or managing the finished product. These include: (a) maintenance and repair items like Paint, Nails, etc., and (b) operating supplies like Lubricant, Computer Stationary, Writing Paper, etc.”