Spice Guard Ltd. manufactures 'Pepper Spray' that is used by women for their self-defence. As per the estimates, there will be an average quarterly…
CA Intermediate · Cost and Management Accounting · PYQS · January 2026
Spice Guard Ltd. manufactures 'Pepper Spray' that is used by women for their self-defence. As per the estimates, there will be an average quarterly total market demand of 3,125 units of 'Pepper Spray'. Spice Guard Ltd. is expected to have 8% market share of the total market demand of the 'Pepper Spray'. The company produces the 'Pepper Spray' using two raw materials - 'OC' and 'OE'. Each unit of pepper spray requires 4 kgs. of 'OC' and 1.6 kgs. of 'OE'. 'OC' 'OE' Ordering Cost per order 3,125 500 Storage rate 5% per annum 2.5 per kg. per month Interest rate 13% per annum 1.25% per quarter Obsolescence rate 2% per annum - Raw material price 2,000 per kg. 200 per kg. On the basis of above case scenario, you are required to answer the following (MCQs 6 to 10):
Suggested Answer and Working Notes:
Correct Answer: Option (B)
4,000 kgs & 1,600 kgs respectively
Topics: Material Cost
Related Questions in this Topic
- M/s Esha Materials Private Limited produces a product which names "ESS". The consumption of raw material for the product...
- Vaibhav Industries Ltd. uses chemical-A in one of its finished products. The chemical-A is purchased from a vendor outsi...
- Himalayan Bakers Pvt. Ltd., a mid-sized bakery chain headquartered in Dehradun, produces its signature product "Multigra...
- Aarav Industrial Resins Pvt. Ltd., headquartered in Ghaziabad, is engaged in manufacturing specialty chemicals used in t...
- Hari Udyog is a small-scale manufacturing unit producing a single product X using two raw materials PK and BK in the inp...