A factory incurred the following expenditure during the year 2025: ₹ Direct material consumed 12,00,000 Manufacturing Wages 7,00,000 Manufacturing…

Budgeted Cost Sheet for the year 2026 Particulars Amount ₹ Direct material consumed 12,00,000 Add: 44% due to increased output 5,28,000 17,28,000 Less: 6% for decline in price 1,03,680 16,24,320 Direct wages (manufacturing) 7,00,000 Add: 60% increase 4,20,000 11,20,000 Prime cost 27,44,320 Manufactured Overhead: Fixed 3,60,000 Add: 20% increase 72,000 4,32,000 Variable 2,50,000 Add: 60% increase 3,26,000 5,76,000 10,08,000 Cost of production 37,52,320 Add: 1/9 of Cost or 10% on selling price 4,16,924 Selling price 41,69,244 Working Note: 1. Production will increase by 60% but efficiency will decline by 10%. 160 – 10% of 160 = 144% So, increase by 44%. 2. Variable overhead once will change because of increase in production by 60% (from 2,50,000 to 4,00,000) then with efficiency declining by 10% it shall be 3,60,000 and then again as mentioned in point No. (iii) of this question it will increase by 60% then variable overhead shall be ₹3,60,000 × 160% = ₹5,76,000.