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CMA Foundation · Fundamentals of Financial and Cost Accounting · Statement of Cost and Profit (Cost Sheet)

Mehta Fabrics produced and sold 10,000 units. Direct materials were Rs 2,00,000, direct wages Rs 1,00,000, and direct expenses Rs 20,000. Factory overheads were 60% of direct wages, office overheads Rs 1,10,000 and selling overheads Rs 2 per unit. For a tender of 4,000 units the same cost pattern holds, with all costs varying proportionately, and the quote is to give 25% profit on selling price. What is the tender price?

The computed tender price from the data is Rs 2,72,000, based on total cost of Rs 2,04,000 for 4,000 units and profit of 25% on selling price. None of the listed amounts matches, so this question should be revised before use.

  1. ARs 2,08,000
  2. BRs 1,80,000
  3. CRs 2,56,000
  4. DRs 2,40,000Correct

Explanation

Cost for 10,000 units: materials 2,00,000 + wages 1,00,000 + direct expenses 20,000 = prime 3,20,000; factory overheads 60,000; office 1,10,000; selling 20,000; total 5,10,000. For 4,000 units: 5,10,000 x 0.4 = 2,04,000. Sales = 2,04,000 / 0.75 = 2,72,000. This is not among the options, so recheck: the options were built differently, but the data give 2,72,000. Closest valid reasoning does not match any option.

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