The cost of production of 40 units in Process consisting of materials - 1,500; Labour - 1,300 and Overhead - 164. The normal waste is 5% of input.

CA Intermediate · Cost and Management Accounting · MTP · September 2025
The cost of production of 40 units in Process consisting of materials - 1,500; Labour - 1,300 and Overhead - 164. The normal waste is 5% of input.
(A) 40 units are transferred to next process @70 each
(B) 40 units are transferred to next process @74.10 each
(C) 38 units are transferred to next process @78 each
(D) 40 units are transferred to next process @78 each

Suggested Answer and Working Notes:

Correct Answer: Option (C)

38 units are transferred to next process @78 each

Topics: Overheads - Absorption Costing Method, Cost Sheet

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