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CA Intermediate · Cost and Management Accounting · Unit & Batch Costing

Anand Toys makes a batch of 500 wooden puzzles. Batch costs: materials ₹30,000; direct labour ₹20,000; setup cost ₹5,000 per batch; factory overhead is 80% of direct labour. Administration overhead is 10% of factory cost. What is the total cost per puzzle?

The key says ₹137.50, but the working gives ₹156.20 per puzzle, so this question does not reconcile and should not be used as written.

  1. A₹137.50Correct
  2. B₹125.00
  3. C₹150.00
  4. D₹121.00

Explanation

Factory overhead = 80% × 20,000 = 16,000. Factory cost = 30,000+20,000+5,000+16,000 = 71,000. Administration = 7,100. Total = 78,100; per unit = ₹156.20, which differs from the key, so the question is inconsistent.

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