T Ltd., a textile manufacturing company, recovers factory overheads on a fixed percentage basis on direct wages and administrative overheads at 25%…

CA Intermediate · Cost and Management Accounting · PYQS · January 2026
T Ltd., a textile manufacturing company, recovers factory overheads on a fixed percentage basis on direct wages and administrative overheads at 25% on factory cost. The company has furnished the following data for Job 201: Direct materials are - 56,350, Direct wages are - 45,000, Sales are - 1,90,000 and profit is 25% on total cost. What is the percentage recovery rate for factory overheads for Job 201?
(A) 35%
(B) 40%
(C) 45%
(D) 50%

Suggested Answer and Working Notes:

Correct Answer: Option (C)

45%

Topics: Overheads - Absorption Costing Method, Cost Sheet

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