CA Intermediate · Cost and Management Accounting · Unit & Batch Costing
Mehta Toys Ltd produces a batch of 1,000 toys. Direct materials cost Rs 30,000 and direct wages Rs 20,000. Factory overheads are 50% of direct wages. Setting-up cost is Rs 5,000 for the batch. Administration overheads are 20% of factory cost. What is the total cost per toy?
Total cost per toy works out to Rs 78 from a total of Rs 78,000 over 1,000 toys.
- ARs 56.40
- BRs 57.60Correct
- CRs 60.00
- DRs 63.00
Explanation
Factory overheads = 50% of 20,000 = 10,000. Factory cost = 30,000 + 20,000 + 10,000 + 5,000 = 65,000. Administration = 20% of 65,000 = 13,000. Total cost = 78,000, per toy = Rs 78. This does not match any option, so the data is flawed; the nearest key is not valid.
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