Due to technical and economical reasons, F8 Ltd. manufactures in batch. The latest contract requires the company to supply 9,000 bushings per month…

CA Intermediate · Cost and Management Accounting · MTP · January 2025
Due to technical and economical reasons, F8 Ltd. manufactures in batch. The latest contract requires the company to supply 9,000 bushings per month to G4 Ltd. The company has estimated that each set up for manufacturing the bushings will cost - 16,002.25 and the inventory holding cost per bushing per annum will come to 60. HOW many runs the company need to make throughout the year to complete the demand?
(A) 5 runs
(B) 10 runs
(C) 15 runs
(D) 20 runs

Suggested Answer and Working Notes:

Correct Answer: Option (C)

15 runs

Topics: Unit & Batch Costing

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