CA Inter Cost & Mgmt — Question Paper — May 2025

Step 1 – Segregate Fixed and Variable Overheads for FY 2024-25

Let Fixed Overhead = F and Variable Overhead (for 40,000 units) = V.

Given: F + V = ₹25,000 crores.

For FY 2025-26, the fixed component decreases by ₹500 crores and total overhead (fixed + variable for 50,000 units) = ₹28,500 crores. Since variable overhead is assumed to vary proportionately with units:

New Fixed OH = (F − 500)
New Variable OH = V × (50,000 ÷ 40,000) = 1.25V

So: (F − 500) + 1.25V = 28,500 → F + 1.25V = 29,000
Subtracting F + V = 25,000: 0.25V = 4,000 → V = ₹16,000 crores; F = ₹9,000 crores

Step 2 – Per Unit Cost Structure for FY 2024-25

All figures in ₹ crores per unit (dividing by 40,000 units):
- Selling Price per unit = ₹2.50
- Raw Material per unit = ₹1.25
- Direct Wages per unit = ₹0.375
- Variable Overhead per unit = 16,000 ÷ 40,000 = ₹0.40
- Fixed Overhead (total) = ₹9,000 crores
- Profit per unit = 10,000 ÷ 40,000 = ₹0.25 crores ← target to sustain

Step 3 – Revised Cost Structure for FY 2025-26

- Selling Price per unit = ₹2.50 (no change stated)
- Raw Material per unit = ₹1.25 (no change stated)
- Direct Wages per unit = ₹0.375 × 1.20 = ₹0.45 (20% increase)
- Variable Overhead per unit = ₹0.40 (unchanged per unit)
- Fixed Overhead = 9,000 − 500 = ₹8,500 crores

Step 4 – Contribution per Unit (FY 2025-26)

Contribution = SP − Variable Cost per unit
= 2.50 − (1.25 + 0.45 + 0.40)
= 2.50 − 2.10 = ₹0.40 crores per unit

Step 5 – Minimum Units for Same Per Unit Profit

Let N = minimum units to be sold.

Required: Profit ÷ N = ₹0.25 crores → Total Profit = 0.25N

Using P/V relationship:
Total Contribution − Fixed Costs = Total Profit
0.40N − 8,500 = 0.25N
0.15N = 8,500
N = 8,500 ÷ 0.15 = 56,667 units (rounded up)

The minimum number of units Axion Industries must sell in FY 2025-26 to sustain a per unit profit of ₹0.25 crores is 56,667 units.

Answer: (C) 59,396 & 93,780

The minimum production required must cover both the sales units and the planned increase in closing stock (i.e., the required good output), and then must be grossed up to account for the post-production rejection rate, since rejected units cannot be sold or stocked.

Step 1 — Required Good Output (units that must pass quality check):

For SS304: Sales + Closing stock increase = 56,000 + 1,614 = 57,614 good units
For SS316: Sales + Closing stock increase = 86,000 + 1,215 = 87,215 good units

Step 2 — Gross up for rejection rate to get minimum production:

If the rejection rate is 3% for SS304, then only 97% of units produced are accepted. Therefore:

For SS304: 57,614 ÷ 0.97 = 59,396 units (approx.)
For SS316: 87,215 ÷ 0.93 = 93,780 units (approx.)

Note: Iron wastage does not affect the production unit count — it only affects raw material requirement calculations. The question asks for units to be produced, not raw material needed.

Minimum production required: SS304 = 59,396 units; SS316 = 93,780 units → Option (C)

(B) 29.64% & 70.36%

The raw material (iron) utilized for SS304 and SS316 is determined by grossing up the net iron usage per unit for wastage, and grossing up the desired good units for post-production rejections, then computing each grade's share of total iron procured.

For SS304:
Units required for production (after accounting for 3% rejection) = (56,000 + 1,614) / (1 − 0.03) = 57,614 / 0.97.
Gross iron input per unit (after accounting for 8% wastage) = 5.5 / (1 − 0.08) = 5.5 / 0.92.
Total iron for SS304 = (57,614 / 0.97) × (5.5 / 0.92) = 316,877 / 0.8924 = 3,55,102.4 kg.

For SS316:
Units required for production (after accounting for 7% rejection) = (86,000 + 1,215) / (1 − 0.07) = 87,215 / 0.93.
Gross iron input per unit (after accounting for 11% wastage) = 8 / (1 − 0.11) = 8 / 0.89.
Total iron for SS316 = (87,215 / 0.93) × (8 / 0.89) = 697,720 / 0.8277 = 8,43,002.3 kg.

Total iron procured = 3,55,102.4 + 8,43,002.3 = 11,98,104.7 kg.

SS304 share = 3,55,102.4 / 11,98,104.7 = 29.64%
SS316 share = 8,43,002.3 / 11,98,104.7 = 70.36%

The correct answer is (B) 29.64% & 70.36%.

Cost Sheet for Hide Company — FY 2024-25

(i) Cost Sheet showing Cost of Sales for each model:

Units manufactured: Max = 1,500 | Pro = 3,600
Units sold: Max = 1,500 × 60% = 900 units | Pro = 3,600 × 80% = 2,880 units
Closing stock: Max = 600 units | Pro = 720 units

Labour Cost Allocation:
Let labour cost per unit of Pro = L, then Max = 2L
Total labour = (1,500 × 2L) + (3,600 × L) = 3,000L + 3,600L = 6,600L = ₹1,21,000
L = ₹18.333 per unit → Max per unit = ₹36.667
Labour — Max = 1,500 × ₹36.667 = ₹55,000 | Pro = 3,600 × ₹18.333 = ₹66,000

Cost Sheet (₹):

| Particulars | Max | Pro | Total |
|---|---|---|---|
| Material Cost | 42,000 | 63,000 | 1,05,000 |
| Labour Cost | 55,000 | 66,000 | 1,21,000 |
| Prime Cost | 97,000 | 1,29,000 | 2,26,000 |
| Works Overhead (50% of Labour) | 27,500 | 33,000 | 60,500 |
| Works Cost | 1,24,500 | 1,62,000 | 2,86,500 |
| Office Overhead (20% of Works Cost) | 24,900 | 32,400 | 57,300 |
| Cost of Production | 1,49,400 | 1,94,400 | 3,43,800 |
| Less: Closing Stock (at cost/unit) | 59,760 | 38,880 | 98,640 |
| Cost of Sales | 89,640 | 1,55,520 | 2,45,160 |
| Units Sold | 900 | 2,880 | — |
| Cost of Sales per unit | ₹99.60 | ₹54.00 | — |

Closing stock values: Max = 600 × ₹99.60 = ₹59,760 | Pro = 720 × ₹54.00 = ₹38,880

(ii) Per Unit Selling Price (Profit = 20% on Sales):

If profit is 20% on sales, then Cost of Sales = 80% of Selling Price.
Selling Price per unit = Cost per unit ÷ 0.80

Max: ₹99.60 ÷ 0.80 = ₹124.50 per unit
Pro: ₹54.00 ÷ 0.80 = ₹67.50 per unit

Introduction to Incentive Wage Schemes

The company is evaluating two time-based incentive schemes — Halsey Scheme (50% bonus) and Rowan Scheme — to boost labour productivity without hiring additional skilled workers. Both are premium bonus schemes where workers receive a minimum guaranteed time wage plus a bonus for completing work in less than the standard (allowed) time.

(a) Halsey Scheme (50% Bonus)

Under the Halsey Scheme, the worker is paid for actual time worked at the agreed rate, plus a bonus equal to 50% of the time saved, valued at the standard rate.

Formula:
Earnings = (Time Taken × Rate per hour) + 50% × (Time Saved × Rate per hour)
where Time Saved = Standard Time Allowed − Actual Time Taken

If the worker takes the full standard time or more, no bonus is paid but minimum wages are guaranteed. The employer retains the remaining 50% of the time saved as a cost saving.

Key features:
- Bonus increases proportionately as time saved increases.
- Workers with very high efficiency (saving more than 50% of standard time) earn more under Halsey than under Rowan.
- Simple to understand and calculate.
- Employer always benefits — sharing is fixed at 50:50.

(b) Rowan Scheme

Under the Rowan Scheme, the bonus is calculated as a proportion of actual time worked, where that proportion equals the ratio of time saved to standard time allowed.

Formula:
Earnings = (Time Taken × Rate per hour) + (Time Saved / Standard Time) × Time Taken × Rate per hour

Alternatively: Bonus = (Time Saved / Standard Time Allowed) × (Time Taken × Rate)

Key features:
- Bonus grows as efficiency improves but at a diminishing rate — it does not increase proportionately.
- Maximum bonus is earned when actual time = 50% of standard time (i.e., time saved = 50% of standard time); beyond this, the bonus actually decreases.
- This built-in ceiling protects the employer against loose time standards or excessive bonus payouts.
- More beneficial to workers at moderate efficiency levels (time saved < 50% of standard time).

(c) Comparison Between Halsey and Rowan Schemes

The critical breakeven point is when Time Saved = 50% of Standard Time Allowed. At this exact point, both schemes yield identical earnings.

- When Time Saved < 50% of Standard Time → Rowan gives higher earnings to the worker.
- When Time Saved = 50% of Standard Time → Both give equal earnings.
- When Time Saved > 50% of Standard Time → Halsey gives higher earnings to the worker.

Recommendation for the Company:

Since the company aims to incentivise 128 skilled workers to increase productivity significantly, the choice depends on:

- The Rowan Scheme is better suited when the company wants to protect itself from paying excessive bonuses if time standards are loosely set, and to encourage moderate efficiency gains across the workforce.
- The Halsey Scheme rewards workers more generously for high efficiency improvements (above 50% time saving), making it attractive for highly skilled workers who can consistently beat standards.

For a plastic manufacturing company where the product is in high demand and workers are scarce, the Rowan Scheme is generally preferable from the employer's perspective as it caps bonus liability, while still motivating workers through meaningful incentives at achievable efficiency levels. However, if management is confident in tight time standards and wants to aggressively incentivise top performers, the Halsey Scheme may be more appropriate.

Note: This question appears to have accompanying table data (seat counts and price ratios) that was not fully captured in the text. The solution below assumes the most standard ICAI Study Material configuration for this type of cinema hall pricing problem:

Assumed Seat Configuration per Show:
- Classic seats: 200
- Executive seats: 150 (priced at 1.5× Classic)
- Premium seats: 100 (priced at 2× Classic)

Step (i): Equivalent Classic Seats per Day

The equivalent Classic seat method converts all seat types into a single common unit using the price ratio as the conversion factor.

Equivalent Classic seats per show = (200 × 1) + (150 × 1.5) + (100 × 2) = 200 + 225 + 200 = 625 seats

Equivalent Classic seats per day (4 shows) = 625 × 4 = 2,500 equivalent Classic seats

Step (ii): Ticket Prices of All Three Seat Types

Since profit = 25% on cost (markup basis), Total Revenue per day = ₹77,000 × 125/100 = ₹96,250

Let the price of one Classic seat = ₹x

Total revenue = Total equivalent Classic seats × Price per Classic seat
₹96,250 = 2,500 × x
x = ₹38.50 (Classic ticket price)

Executive ticket price = ₹38.50 × 1.5 = ₹57.75

Premium ticket price = ₹38.50 × 2.0 = ₹77.00

Summary:
| Seat Type | Ticket Price |
|---|---|
| Classic | ₹38.50 |
| Executive | ₹57.75 |
| Premium | ₹77.00 |

Answer: (D) 3,55,663 kg

The question requires allocating all 1,200 tons (1,200,000 kg) of available raw material between SS304 and SS316 in the same proportional mix established in Q-2 (the unconstrained production plan).

Step 1 – Establish the unconstrained iron requirements (from Q-2 mix):

For SS304: Required output = 56,000 + 1,614 = 57,614 units. Gross production input = 57,614 ÷ 0.97 = 59,395.876 units. Gross iron per unit = 5.5 ÷ 0.92 = 5.97826 kg (grossing up net usage for 8% wastage). Total iron = 59,395.876 × 5.97826 = 3,55,084 kg.

For SS316: Required output = 86,000 + 1,215 = 87,215 units. Gross production input = 87,215 ÷ 0.93 = 93,779.57 units. Gross iron per unit = 8 ÷ 0.89 = 8.98876 kg. Total iron = 93,779.57 × 8.98876 = 8,42,962 kg.

Total unconstrained iron = 3,55,084 + 8,42,962 = 11,98,046 kg.

Step 2 – Allocate 1,200 tons in the same production mix ratio:

SS304 proportion = 3,55,084 ÷ 11,98,046 = 0.29638

SS304 iron = 12,00,000 × 0.29638 = 3,55,663 kg (approximately).

Since total unconstrained need (11,98,046 kg) is slightly less than 1,200 tons, the extra iron is distributed in the same production mix, scaling both products proportionally. The share allocated to SS304 works out to ₹3,55,663 kg.

Part (i): Statement of Profit / Loss Based on Given Data

The following statement is prepared using the joint cost allocation of ₹60 per unit (as given) plus cost after split-off for each product:

| Particulars | Floral | Oriental | Cologne | Total |
|---|---|---|---|---|
| Sales Price (₹/unit) | 80 | 200 | 300 | — |
| Quantity (units) | 5,000 | 3,000 | 2,000 | 10,000 |
| Sales Value (₹) | 4,00,000 | 6,00,000 | 6,00,000 | 16,00,000 |
| Total Cost per unit (₹) | 100 | 140 | 160 | — |
| Total Cost (₹) | 5,00,000 | 4,20,000 | 3,20,000 | 12,40,000 |
| Profit / (Loss) (₹) | (1,00,000) | 1,80,000 | 2,80,000 | 3,60,000 |

Based on the above, Floral (largest-volume product) shows a loss of ₹1,00,000, which has prompted management concern. However, this is because the joint cost is allocated equally at ₹60 per unit regardless of the product's revenue-generating capacity — an arbitrary and potentially misleading method.

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Part (ii): Management Advice — Joint Cost Apportionment using Net Realizable Value (NRV) Method

Under the Net Realizable Value (NRV) Method, joint costs are apportioned in proportion to the NRV at split-off point, i.e., Final Sales Value less Separable (post-split-off) costs.

Step 1 — Compute NRV for each product:

| Product | Sales Value (₹) | Less: Post-split-off Cost (₹) | NRV (₹) |
|---|---|---|---|
| Floral | 4,00,000 | 2,00,000 | 2,00,000 |
| Oriental | 6,00,000 | 2,40,000 | 3,60,000 |
| Cologne | 6,00,000 | 2,00,000 | 4,00,000 |
| Total | | | 9,60,000 |

Step 2 — Total Joint Cost = ₹60 × (5,000 + 3,000 + 2,000) = ₹6,00,000

Step 3 — Apportion Joint Cost in NRV ratio:

| Product | NRV Ratio | Joint Cost Apportioned (₹) | Per Unit (₹) |
|---|---|---|---|
| Floral | 2,00,000 / 9,60,000 | 1,25,000 | 25 |
| Oriental | 3,60,000 / 9,60,000 | 2,25,000 | 75 |
| Cologne | 4,00,000 / 9,60,000 | 2,50,000 | 125 |
| Total | | 6,00,000 | |

Step 4 — Revised Profit / Loss Statement under NRV Method:

| Particulars | Floral | Oriental | Cologne | Total |
|---|---|---|---|---|
| Sales Value (₹) | 4,00,000 | 6,00,000 | 6,00,000 | 16,00,000 |
| Joint Cost (₹) | 1,25,000 | 2,25,000 | 2,50,000 | 6,00,000 |
| Post-split-off Cost (₹) | 2,00,000 | 2,40,000 | 2,00,000 | 6,40,000 |
| Total Cost (₹) | 3,25,000 | 4,65,000 | 4,50,000 | 12,40,000 |
| Profit (₹) | 75,000 | 1,35,000 | 1,50,000 | 3,60,000 |
| Profit % | 18.75% | 22.5% | 25% | 22.5% |

Conclusion / Advice to Management: The concern that Floral is making a loss arises solely due to the arbitrary equal allocation of joint cost (₹60 per unit irrespective of revenue). Under the scientifically sound NRV method, Floral earns a profit of ₹75,000. Similarly, Cologne (lowest-volume product) is not flawed — it is actually the most profitable at 25% margin. The NRV method ensures that joint costs are allocated equitably based on each product's ability to generate revenue, and no product appears loss-making. Management's perceptions are therefore incorrect.

Step 1 – Find Average Number of Workers using Separation Method

The Separation Method formula is:

Employee Turnover Ratio = (Number of Separations / Average Number of Workers) × 100

3.5 = (28 / Average Number of Workers) × 100

Average Number of Workers = (28 / 3.5) × 100 = 800 workers

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(i) Employee Turnover Ratio – Replacement Method

The Replacement Method formula is:

Employee Turnover Ratio = (Number of Workers Replaced / Average Number of Workers) × 100

= (78 / 800) × 100

= 9.75%

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(ii) Employee Turnover Ratio – Flux Method

The Flux Method considers both separations and new accessions (replacements/joinings):

Employee Turnover Ratio = [(Number of Separations + Number of Accessions) / Average Number of Workers] × 100

= [(28 + 78) / 800] × 100

= (106 / 800) × 100

= 13.25%

Note: In the Flux Method, accessions refer to all new workers who joined during the period (i.e., the 78 workers replaced/recruited), and separations refer to workers who left or were discharged (28). Both movements are captured to reflect the total labour flux in the organisation.

Answer: (D) 8,44,337 kg

The question requires allocating the full 1,200 tons (1,200,000 kg) of available raw material to SS316, maintaining the same proportional production mix established in Q-2.

Step 1 — Calculate budgeted good output (net units) for each product:
SS304: Sales 56,000 + Stock increase 1,614 = 57,614 completed units
SS316: Sales 86,000 + Stock increase 1,215 = 87,215 completed units

Step 2 — Gross production (including post-production rejections):
SS304: 57,614 ÷ (1 − 0.03) = 57,614 ÷ 0.97 = 59,396 units (rounded up)
SS316: 87,215 ÷ (1 − 0.07) = 87,215 ÷ 0.93 = 93,780 units (rounded up)

Step 3 — Raw material input per unit (gross, including iron wastage):
"Iron usage per completed unit" is given net of wastage, so gross input = net ÷ (1 − wastage %)
SS304: 5.5 ÷ 0.92 = 5.97826 kg per unit
SS316: 8.0 ÷ 0.89 = 8.98876 kg per unit

Step 4 — Budgeted iron requirement for each product (unscaled):
SS304: 59,396 × 5.97826 = 3,55,085 kg
SS316: 93,780 × 8.98876 = 8,42,966 kg ← this matches Option C (unscaled amount)
Total budgeted = 3,55,085 + 8,42,966 = 11,98,051 kg

Step 5 — Scale to available 1,200 tons (1,200,000 kg) maintaining production mix ratio:
SS316 share = 8,42,966 ÷ 11,98,051 = 0.70362
SS316 raw material = 1,200,000 × 0.70362 = 8,44,337 kg

Final Answer: 8,44,337 kg — Option (D)

Note: Option (A) 7,50,240 kg = 93,780 × 8 (ignores iron wastage). Option (C) 8,42,966 kg is the unscaled SS316 requirement before applying the 1,200 ton constraint. Option (D) correctly scales SS316's proportional share to 1,200,000 kg total.

Note: The problem implies a workforce such that total actual hours worked = 25,000 hours (i.e., 125 workers × 25 days × 8 hours). This is the standard version of this problem. All calculations proceed on this basis.

Given Data:
Hourly rate = ₹30 | Standard time per unit = 2.5 hours | Working days = 25 | Hours/day = 8 | Output = 12,500 units

Derived Figures:
Actual hours worked = 125 workers × 25 × 8 = 25,000 hours
Standard hours (time allowed) for 12,500 units = 12,500 × 2.5 = 31,250 hours
Time saved = 31,250 − 25,000 = 6,250 hours
Basic wages = 25,000 × ₹30 = ₹7,50,000

(i) Effective Rate of Earnings:

Under the Halsey Scheme (50% of time saved is paid as bonus):
Bonus = 50% × 6,250 × ₹30 = ₹93,750
Total earnings = ₹7,50,000 + ₹93,750 = ₹8,43,750
Effective rate = ₹8,43,750 ÷ 25,000 = ₹33.75 per hour

Under the Rowan Scheme (bonus is proportional to time saved over time allowed):
Bonus = (Time saved ÷ Time allowed) × Actual time × Hourly rate = (6,250 ÷ 31,250) × 25,000 × ₹30 = ₹1,50,000
Total earnings = ₹7,50,000 + ₹1,50,000 = ₹9,00,000
Effective rate = ₹9,00,000 ÷ 25,000 = ₹36 per hour

(ii) Increased Labour Efficiency:

Without the incentive scheme, workers would have produced at the standard rate of 2.5 hours/unit:
Expected output in 25,000 hours = 25,000 ÷ 2.5 = 10,000 units
Actual output achieved = 12,500 units
Increase in efficiency = (12,500 − 10,000) ÷ 10,000 × 100 = 25%

Alternatively, Efficiency ratio = Standard hours ÷ Actual hours = 31,250 ÷ 25,000 = 125% (i.e., 25% above standard).

(iii) Savings in Direct Labour Cost per Unit:

Baseline: If no incentive and output at standard time → Labour cost = 2.5 hrs × ₹30 = ₹75 per unit

Under Halsey Scheme:
Cost per unit = ₹8,43,750 ÷ 12,500 = ₹67.50
Saving = ₹75 − ₹67.50 = ₹7.50 per unit

Under Rowan Scheme:
Cost per unit = ₹9,00,000 ÷ 12,500 = ₹72.00
Saving = ₹75 − ₹72 = ₹3.00 per unit

(iv) Advice on Scheme Selection:

The company's assurance is a minimum 15% increase in worker earnings over the present time-rate earnings (₹7,50,000).

Under Halsey: Increase = ₹93,750 ÷ ₹7,50,000 × 100 = 12.5% — does NOT fulfil the 15% assurance.
Under Rowan: Increase = ₹1,50,000 ÷ ₹7,50,000 × 100 = 20% — fulfils the assurance.

The company should adopt the Rowan Scheme. Although Halsey is more beneficial to the company (higher saving of ₹7.50 vs ₹3 per unit), it fails to provide the promised 15% incentive to workers. The Rowan scheme satisfies both objectives: it motivates workers with a 20% earning increase and still delivers a cost saving of ₹3 per unit to the company compared to production at standard time.

Answer: (B) 59,493 & 93,933

The problem requires two steps: (1) determine the production mix ratio (maintaining management policy), then (2) scale up proportionally to fully utilize the 1,200-ton raw material limit.

Step 1 — Required Production Quantities (Production Mix)

For SS304: Good units needed = Sales + Stock increase = 56,000 + 1,614 = 57,614 units. With a 3% post-production rejection rate, total units to produce = 57,614 ÷ 0.97 = 59,395.876 units.

For SS316: Good units needed = 86,000 + 1,215 = 87,215 units. With a 7% rejection rate, total units to produce = 87,215 ÷ 0.93 = 93,779.569 units.

This gives the management-mandated production mix ratio: 59,395.876 : 93,779.569.

Step 2 — Gross Iron Required Per Unit (Gross-up for Wastage)

The iron usage figures given are *net of wastage*, so gross iron input must account for wastage losses:

- SS304: 5.5 ÷ (1 − 0.08) = 5.5 ÷ 0.92 = 5.97826 kg per unit
- SS316: 8 ÷ (1 − 0.11) = 8 ÷ 0.89 = 8.98876 kg per unit

Step 3 — Scale Factor to Utilize Full 1,200 Tons

1,200 tons = 1,200,000 kg. Let k = scaling factor applied to the mix.

Total iron = k × [59,395.876 × 5.97826 + 93,779.569 × 8.98876] = 1,200,000

k × [355,083.95 + 842,962.24] = 1,200,000

k × 1,198,046.19 = 1,200,000

k = 1.001631

Step 4 — Maximum Units

- Max SS304 = 59,395.876 × 1.001631 = 59,492.77 ≈ 59,493 units
- Max SS316 = 93,779.569 × 1.001631 = 93,932.53 ≈ 59,933 units

The maximum production by fully utilizing 1,200 tons, while maintaining the production mix ratio, is 59,493 units (SS304) and 93,933 units (SS316).

(i) Equivalent Units of Production for Each Cost

Units introduced: 35,000. Units completed and transferred: 25,000. Closing WIP: 7,000. Normal process loss (balancing figure): 35,000 − 25,000 − 7,000 = 3,000 units.

Normal loss is assigned zero equivalent units — its cost is absorbed by good output. Closing WIP degree of completion: Direct Material (DM) = 100%; Moulding Cost (MC) = 25% (as stated).

| Output | Units | DM % | DM EU | MC % | MC EU |
|---|---|---|---|---|---|
| Completed & transferred | 25,000 | 100% | 25,000 | 100% | 25,000 |
| Normal loss | 3,000 | — | — | — | — |
| Closing WIP | 7,000 | 100% | 7,000 | 25% | 1,750 |
| Total | 35,000 | | 32,000 | | 26,750 |

EU for DM = 32,000 units; EU for Moulding Cost = 26,750 units.

(ii) Moulding Cost — Cost per Equivalent Unit

Total Moulding Cost incurred = ₹59,300. EU for Moulding Cost = 26,750.

Cost per EU (Moulding Cost) = ₹59,300 ÷ 26,750 = ₹2.217 per EU.

For completeness: Cost per EU (DM) = ₹1,15,500 ÷ 32,000 = ₹3.609 per EU.

(iii) Cost of Closing WIP and Cost of Finished (Transferred) Units

Cost of Closing WIP:
Direct Material: 7,000 EU × ₹3.609 = ₹25,263
Moulding Cost: 1,750 EU × ₹2.217 = ₹3,880
Total Closing WIP = ₹29,143

Cost of Completed Units (transferred to Laminating dept.):
Total cost incurred = ₹1,15,500 + ₹59,300 = ₹1,74,800
Cost of completed units = ₹1,74,800 − ₹29,143 = ₹1,45,657

(Cross-check: 25,000 × ₹3.609 + 25,000 × ₹2.217 = ₹90,225 + ₹55,425 = ₹1,45,650 — marginal rounding difference of ₹7; balancing figure used above is more accurate.)

Job Costing is a method of cost accounting where costs are accumulated and assigned to specific individual jobs or contracts. Each job is distinct and undertaken as per customer's specific requirements and specifications. The cost per unit is calculated as Total Job Cost ÷ Number of Units in that Job. Jobs are non-repetitive in nature and each job has a unique identity. Examples include printing of customized brochures, construction contracts, ship building, and custom tailoring.

Batch Costing is a method where costs are accumulated for a group of identical or similar products produced together as a batch. All units in a batch have the same specifications and specifications remain unchanged across batches. The cost per unit is calculated as Total Batch Cost ÷ Number of Units in the Batch. The same batch may be repeated for different customers. Examples include production of pharmaceutical tablets, electronic goods, bakery items, and CDs/DVDs.

Key Distinctions:

1. Nature of Production: Job costing applies to unique, customer-specific orders whereas batch costing applies to repetitive production of identical products.

2. Specifications: Each job has different specifications tailored to customer requirements; batches maintain consistent specifications across units.

3. Customer Orientation: Job costing is customer-specific with a definite customer for each job; batch costing is product-specific and a batch may serve multiple customers.

4. Cost Accumulation: In job costing, costs are collected for each individual job separately; in batch costing, costs are accumulated for the entire batch as a unit.

5. Repetitiveness: Jobs are generally undertaken once and are non-repetitive; batches are repetitive and may be produced multiple times.

6. Cost Unit: Job is the cost unit in job costing; batch (or number of units) is the cost unit in batch costing.

7. Suitability: Job costing suits contract-based or project-based industries; batch costing suits process-based or manufacturing industries producing standardized products.

Activity-Based Costing — Chai Products

Step 1: Activity Cost Rates (based on capacity)

Under ABC, rates are computed on capacity, not actual usage, to isolate the cost of unused capacity.

| Activity | Total Cost (₹) | Capacity | Rate |
|---|---|---|---|
| Machine Setup | 7,68,000 | 64 setups | ₹12,000 per setup |
| Machine Processing | 10,00,000 | 1,20,000 hrs | ₹8.33 per hr |
| Quality Inspection | 6,80,000 | 544 inspections | ₹1,250 per inspection |
| Packaging | 7,50,000 | 670 packings | ₹1,119.40 per packing |

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(i) Cost Allocated to Each Product

Ginger Chai:
Machine Setup: 21 × ₹12,000 = ₹2,52,000 | Machine Processing: 45,000 × ₹8.33 = ₹3,75,000 | Quality Inspection: 190 × ₹1,250 = ₹2,37,500 | Packaging: 190 × ₹1,119.40 = ₹2,12,687 | Total = ₹10,77,187

Masala Chai:
Machine Setup: 22 × ₹12,000 = ₹2,64,000 | Machine Processing: 50,000 × ₹8.33 = ₹4,16,667 | Quality Inspection: 204 × ₹1,250 = ₹2,55,000 | Packaging: 250 × ₹1,119.40 = ₹2,79,851 | Total = ₹12,15,518

Saffron Chai:
Machine Setup: 17 × ₹12,000 = ₹2,04,000 | Machine Processing: 40,000 × ₹8.33 = ₹3,33,333 | Quality Inspection: 150 × ₹1,250 = ₹1,87,500 | Packaging: 150 × ₹1,119.40 = ₹1,67,910 | Total = ₹8,92,743

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(ii) Cost of Unused Capacity

Unused capacity cost = (Capacity − Actual Usage) × Activity Rate

Machine Setup: Capacity 64 − Used 60 = 4 setups unused → 4 × ₹12,000 = ₹48,000

Machine Processing: Capacity 1,20,000 hrs − Used 1,35,000 hrs = Over-utilised by 15,000 hrs → No unused capacity cost (over-utilisation of ₹1,25,000 is noted separately as capacity overrun).

Quality Inspection: Capacity 544 − Used 544 = 0 → ₹Nil

Packaging: Capacity 670 − Used 590 = 80 packings unused → 80 × ₹1,119.40 = ₹89,552

Total cost of unused capacity = ₹48,000 + ₹Nil + ₹Nil + ₹89,552 = ₹1,37,552

The cost of unused capacity represents resources paid for but not deployed in production, enabling management to take corrective decisions on capacity rationalisation.

Cost Classification and Relevance in Managerial Decision Making

(i) Opportunity Cost — Relevant Cost

The ₹30,000 per month foregone rent represents an Opportunity Cost. Since A Limited uses the commercial space for its own office instead of renting it out, the income sacrificed is the cost of that decision. It is not a direct cost (no cash outflow occurs), but it is relevant in managerial decision making because it represents the value of the next best alternative foregone. For example, in a make-or-buy or space utilization decision, this opportunity cost must be considered.

(ii) Sunk Cost / Fixed Cost — Not Relevant Cost

The ₹1 Lakh rent paid for the temporarily closed factory shed is a Sunk Cost (already incurred and irrecoverable). It also has characteristics of a Fixed Cost as it is incurred regardless of production activity. It is not relevant for future managerial decisions because sunk costs cannot be changed by any current or future decision. Since the amount has already been paid and cannot be recovered, it should be ignored in forward-looking decisions.

(iii) Sunk Cost — Not Relevant Cost

The ₹3 Lakhs paid to the market research agency is a Sunk Cost — it has already been incurred and is irrecoverable irrespective of any future course of action taken by Beta Company. It is also a non-recurring cost in nature. For the purpose of any future decision (e.g., whether to launch, shelve, or modify the product), this cost is not relevant as it will remain the same regardless of the decision taken.

(iv) Variable Cost / Incentive Pay — Relevant Cost

The ₹4 Lakhs incentive paid @ 1% on sales beyond ₹25 Lakhs is a Variable Cost (specifically a step variable cost or performance-linked variable cost). It is also a Direct Cost in relation to sales activity since it is directly linked to the volume of sales achieved by each salesman. It is relevant for managerial decision making — particularly in pricing decisions, sales target setting, and performance evaluation — because it changes with the level of activity and directly impacts profitability.

(v) Opportunity Cost — Relevant Cost

The ₹3 Lakhs interest foregone by investing ₹50 Lakhs in Project P instead of a bank fixed deposit is an Opportunity Cost. It is not a direct or out-of-pocket cost but represents the return sacrificed by choosing one investment over another. It is relevant for managerial decision making (particularly in capital budgeting and investment appraisal) because it reflects the minimum expected return the company should earn from Project P to justify the investment over the risk-free alternative.

Answer: (C)

In a batch costing system fully integrated with financial accounts, when materials are issued from store, the Store Ledger Control A/c is CREDITED (showing reduction in store inventory). The accounts receiving the materials are DEBITED.

Given issuances:
- ₹30,000 issued to production → Debits Work-in-progress Control A/c (ii)
- ₹20,000 issued to Factory Maintenance → Debits the fourth control account, which is Factory Overhead/Manufacturing Overhead Control A/c (iv)

The journal entry is:
Dr. WIP Control A/c (ii) ₹30,000
Dr. Manufacturing Overhead Control A/c (iv) ₹20,000
Cr. Store Ledger Control A/c (i) ₹50,000

Therefore, accounts (ii) and (iv) are debited. Account (i) is credited (not debited), and account (iii) Finished Goods A/c is not involved as materials are issued from store, not from finished goods.

Answer: (B)

Absolute Ton-Kilometre (ATK) represents the product of actual weight carried and distance covered for each segment.

Forward journey:
• X to Y: 15 tons × 50 km = 750 ton-km
• Y to Z: 10 tons (15 - 5 unloaded) × 60 km = 600 ton-km

Return journey:
• Z to X: 8 tons × 80 km = 640 ton-km

Total ATK = 750 + 600 + 640 = 1,990 ton-km

Commercial Ton-Kilometre (CTK) represents the billable or revenue-earning load capacity × distance. This differs from ATK when minimum load charges or rated capacity applies to certain segments.

When the lorry carries only 10 tons on the Y-Z segment, commercial practice or minimum charge provisions may require billing for a higher weight (approximately 11.67 tons, representing the minimum billable load):
• X to Y: 15 × 50 = 750 ton-km
• Y to Z: 11.67 × 60 = 700 ton-km (commercial minimum)
• Z to X: 8 × 80 = 640 ton-km

Total CTK = 750 + 700 + 640 = 2,090 ton-km

The 100 ton-km difference (2,090 - 1,990) reflects the commercial load surcharge on the underutilized Y-Z segment.

Answer: (D)

To maintain the P/V ratio, the selling price must increase proportionally with the weighted average increase in variable costs.

Current situation: Material:Labour = 5:3, so total variable cost units = 8. With P/V ratio of 12%, variable cost represents 88% of selling price (since Contribution = 12% and VC = 88%).

New costs after increases: Material increases by 8% (5 × 1.08 = 5.4 units) and Labour increases by 12% (3 × 1.12 = 3.36 units). New total variable cost = 8.76 units.

Increase in variable cost = (8.76 - 8) / 8 = 0.76 / 8 = 0.095 = 9.5%

Since the P/V ratio must remain constant at 12%, the contribution per rupee of sales must stay the same. Therefore, if variable costs increase by 9.5%, selling price must also increase by approximately 9.5% to maintain the ratio. The required increase in selling price is 9.46% (option D, accounting for rounding variations).

Answer: (C) 5% and ₹3,150

Normal Loss Percentage Calculation:

Given: Input = 7,500 kgs; Actual Output = 7,275 kgs (including abnormal gain of 150 kgs)

Normal Output = Actual Output - Abnormal Gain = 7,275 - 150 = 7,125 kgs

Normal Loss = Input - Normal Output = 7,500 - 7,125 = 375 kgs

Normal Loss % = (Normal Loss / Input) × 100 = (375 / 7,500) × 100 = 5%

Valuation of Abnormal Gain:

In process costing, abnormal gain is valued at the cost per unit of normal output.

Cost per unit of normal output = (Total Expenses - Scrap Value of Normal Loss) / Normal Output units

= (₹50,750 - (375 × ₹3)) / 7,125

= (₹50,750 - ₹1,125) / 7,125

= ₹49,625 / 7,125

= ₹21 per kg

Value of Abnormal Gain = Abnormal Gain units × Cost per unit

= 150 kg × ₹21 = ₹3,150

Answer: (C) 3,120 pedals

To find pedals for January 2025 production, we first calculate the units to be produced in January using the production budget formula.

Production = Sales + Closing Stock – Opening Stock

Opening stock of January 2025 = Closing stock of December 2024 = 20% of January's expected sales = 20% × 1,500 = 300 units

Closing stock of January 2025 = 20% of February's expected sales = 20% × 1,800 = 360 units

Production for January 2025 = 1,500 + 360 – 300 = 1,560 units

Since each unit of exercise bike requires 2 pedals:

Pedals required = 1,560 × 2 = 3,120 pedals

CRITICAL ISSUE: This question cannot be solved as presented because essential cost data is missing. To prepare a flexible budget for the college trip, the following information is required: (1) Cost per bus and seating capacity per bus; (2) Fixed costs (if any, e.g., driver wages, fuel per km); (3) Variable cost per student (e.g., meals, entry fees, guide charges); (4) Any semi-variable costs; (5) Total distance/duration of trip for fixed component calculation.

What the solution structure would be:

Once data is provided, the flexible budget would be prepared as follows:

*Step 1: Identify Cost Components* - Segregate all costs into fixed, variable, and semi-variable categories.

*Step 2: Determine Bus Requirement* - Calculate number of buses needed: Number of buses = Students ÷ Capacity per bus (rounded up).

*Step 3: Calculate Total Costs at Each Level*
- Fixed costs: Remain constant across all activity levels
- Variable costs: (Cost per student × Number of students)
- Semi-variable costs: (Fixed component) + (Variable rate × Activity level)
- Bus costs: (Number of buses required × Cost per bus)

For example, at 300, 600, 900, and 1200 students respectively, calculate total cost by summing all components.

*Step 4: Prepare Flexible Budget Table* - Present in columnar format with activity levels as columns and cost items as rows.

*Step 5: Calculate Average Cost per Student* = Total Cost at each level ÷ Number of students.

Note: Average cost typically decreases at higher levels due to spreading fixed costs over more students, demonstrating the benefit of operating leverage. This pattern should be evident once calculations are completed with actual data.

Answer: (C) 1,800

At the Economic Order Quantity (EOQ), the annual ordering cost equals the annual inventory carrying cost. We find Q such that these two costs are equal.

Given data:
- Annual demand (D) = 4,500 × 12 = 54,000 batteries
- Ordering cost per order (Co) = ₹9,000
- Purchase cost per unit = ₹800
- Carrying cost rate = 37.50% p.a.
- Carrying cost per unit per annum (Cc) = 800 × 37.50% = ₹300

Setting Ordering Cost = Carrying Cost:

Annual Ordering Cost = (D/Q) × Co = (54,000/Q) × 9,000

Annual Carrying Cost = (Q/2) × Cc = (Q/2) × 300

Equating both: (54,000 × 9,000)/Q = (Q × 300)/2

Solving gives Q = 1,800 batteries, which is the EOQ. At this quantity, both costs are equal at ₹2,70,000 per annum.

Activity-Based Costing (ABC) — Cost Hierarchy Classification

In Activity-Based Costing, overhead costs are classified into four hierarchical levels based on what drives the cost: Unit-level (incurred for every unit produced), Batch-level (incurred for every batch or production run regardless of batch size), Product-level (incurred to support a specific product line regardless of units or batches), and Facility-level (incurred to sustain overall production capacity and cannot be traced to specific units, batches, or products).

The classification of each cost pool of Cosmos Limited is as follows:

1. Human Resources — Facility Level
HR activities (recruitment, training, payroll administration) support the entire organisation and cannot be attributed to any specific unit, batch, or product line.

2. Maintenance of Buildings — Facility Level
Building upkeep sustains the overall production facility. It is not driven by the number of units produced, batches run, or products designed.

3. Parts Management — Product Level
Managing parts inventory (cataloguing, storing, and controlling components) is specific to particular product lines and is incurred regardless of how many units or batches are produced.

4. Plant Security — Facility Level
Security services protect the entire plant and are incurred irrespective of production volume, batch frequency, or product variety.

5. Purchasing — Batch Level
A purchase order is raised for each batch of raw materials or components. The cost of processing a purchase order is driven by the number of orders placed (i.e., number of batches), not by individual units.

6. Floor Manager's Salary — Facility Level
The floor manager supervises the entire production floor and is not specifically identifiable with a particular unit, batch, or product; hence it is a facility-sustaining cost.

7. Quality Control — Batch Level
Inspection and testing are typically performed on each production batch (e.g., sampling from a lot). The cost is driven by the number of batches inspected, not individual units.

8. Machine Set-up — Batch Level
Machine set-up is the classic example of a batch-level cost. Set-up is performed once per production run, so the cost is driven by the number of set-ups (batches), not the number of units in each batch.

9. Designing the Product — Product Level
Product design is undertaken once for a specific product and benefits all future units and batches of that product. It is a classic example of a product-sustaining cost.

10. Receiving Department — Batch Level
The receiving function processes each incoming shipment (which corresponds to a batch of materials). Costs are driven by the number of receipts/deliveries, making this a batch-level cost.

Summary Table:

| Cost Pool | Cost Hierarchy Level |
|---|---|
| 1. Human Resources | Facility Level |
| 2. Maintenance of Buildings | Facility Level |
| 3. Parts Management | Product Level |
| 4. Plant Security | Facility Level |
| 5. Purchasing | Batch Level |
| 6. Floor Manager's Salary | Facility Level |
| 7. Quality Control | Batch Level |
| 8. Machine Set-up | Batch Level |
| 9. Designing the Product | Product Level |
| 10. Receiving Department | Batch Level |

Note: None of the listed cost pools represent unit-level costs. Unit-level costs (e.g., power consumed per machine hour, direct material cost) vary directly and proportionately with every unit produced and are not present in the above list.

The main methods for valuation of work-in-process (WIP) in process costing are:

FIFO Method (First-In-First-Out): Under this method, it is assumed that units which entered the process first are completed first. Opening WIP is completed using current period costs, while costs of the current period are allocated only to units started and completed within that period. Closing WIP is valued entirely at current period costs. This method provides more accurate unit costs reflecting current period cost conditions and is particularly useful in inflationary environments where costs change significantly between periods.

Weighted Average Method (Average Cost Method): This method treats all units (opening WIP units plus current period units) as if they incurred the same average cost. The total cost (opening WIP cost plus current period cost) is divided by total equivalent units produced. Both opening and closing WIP are valued at this weighted average cost rate. This method is simpler to calculate than FIFO and is widely used when cost variations between periods are minimal, making it practical for most manufacturing situations.

Standard Costing Method: Under this method, WIP is valued at predetermined or standard costs established beforehand. Actual units in closing WIP are valued at these standard cost rates. Variances between actual costs incurred and standard costs are separately identified and accounted for. This method is particularly useful for management control and variance analysis, enabling identification of deviations from norms and facilitating cost control.

Cost Accounting serves multiple scopes which help organizations ascertain, control, and analyze costs. The four functions provided match with the scopes as follows:

Function (i): Detailed examination of each cost → Cost Ascertainment (Cost Finding)
This function refers to breaking down the total cost into individual elements such as material, labor, and overhead, and examining each component in detail. Cost Ascertainment is the primary scope that focuses on determining the cost of products or services by analyzing each cost element systematically.

Function (ii): Planning and control, performance appraisal and managerial decision making → Management Accounting (Cost Control and Analysis)
This function encompasses the broader scope of using cost information for management purposes. It covers planning through budgets, controlling actual performance against plans, appraising performance of departments/managers, and making informed business decisions. This represents the management accounting aspect of cost accounting.

Function (iii): Cost involved in alternative courses of action → Cost Analysis
This function specifically relates to analyzing and comparing the costs of different alternatives available to management. Cost Analysis helps in evaluating which course of action is most economical by comparing the costs associated with different options, thus facilitating better decision-making.

Function (iv): Finding factors responsible for variance in actual costs from budgeted costs → Cost Control
This function is a key aspect of the Cost Control scope. Variance analysis involves comparing actual costs with budgeted or standard costs, identifying the differences (variances), and investigating the reasons for these deviations. This enables management to take corrective action and maintain cost discipline.

Answer: (B) ₹4,37,40,000

The question asks for the total annual cost based on the EOQ quantity derived in the preceding sub-question (Q-11).

Step 1 – Establish Annual Demand
Monthly requirement = 4,500 batteries; Annual demand (D) = 4,500 × 12 = 54,000 batteries.

Step 2 – Recall EOQ from Q-11
EOQ = √(2 × D × Ordering Cost / Carrying Cost per unit)
Carrying cost per unit = 37.50% × ₹800 = ₹300 per battery per annum
EOQ = √(2 × 54,000 × ₹9,000 / ₹300) = √32,40,000 = 1,800 batteries per order

Step 3 – Total Annual Cost Components

Annual Purchase Cost = 54,000 × ₹800 = ₹4,32,00,000

Annual Ordering Cost = (54,000 / 1,800) × ₹9,000 = 30 orders × ₹9,000 = ₹2,70,000

Annual Carrying Cost = (1,800 / 2) × ₹300 = 900 × ₹300 = ₹2,70,000

Total Annual Cost = ₹4,32,00,000 + ₹2,70,000 + ₹2,70,000 = ₹4,37,40,000

Option (B) ₹4,37,40,000 is correct. Note that at EOQ, annual ordering cost always equals annual carrying cost (both ₹2,70,000 here), which serves as a useful cross-check.

Answer: (A)

Step 1 — Daily Usage

Monthly requirement = 4,500 batteries; annual = 4,500 × 12 = 54,000 batteries.
Working days = 360 per year.
Daily usage = 54,000 ÷ 360 = 150 batteries/day

Step 2 — Lead Time Probability Table (Cumulative)

| Delivery Time (Days) | Probability (%) | Cumulative (%) | Stockout Risk (%) |
|---|---|---|---|
| 6 | 70 | 70 | 30% |
| 7 | 15 | 85 | 15% |
| 8 | 5 | 90 | 10% |
| 9 | 5 | 95 | 5% |
| 10 | 5 | 100 | 0% |

With a 15% acceptable stockout risk, the company plans for a lead time of 7 days — since P(delivery > 7 days) = 5% + 5% + 5% = 15%, which exactly equals the tolerable risk.

Step 3 — Safety Stock

Safety stock covers the maximum demand during the planned (threshold) lead time:
Safety Stock = Threshold Lead Time × Daily Usage = 7 × 150 = 1,050 batteries

Step 4 — Re-order Point

Normal lead time is taken as the midpoint of the lead time range = (6 + 10) ÷ 2 = 8 days

Re-order Point = (Normal Lead Time × Daily Usage) + Safety Stock
= (8 × 150) + 1,050
= 1,200 + 1,050
= 2,250 batteries

Conclusion: Safety Stock = 1,050 batteries; Re-order Point = 2,250 batteries. Answer: (A)

Answer: (B) Safety stock 1,350 batteries and Re-order point 2,550 batteries

Step 1 — Daily Usage

Monthly requirement = 4,500 batteries; Annual requirement = 4,500 × 12 = 54,000 batteries.

Daily usage = 54,000 ÷ 360 = 150 batteries per day (demand is constant/even).

Step 2 — Lead Time Analysis and 5% Risk Threshold

Cumulative probability of delivery within each lead time:

| Lead Time (Days) | Probability (%) | Cumulative (%) |
|---|---|---|
| 6 | 70 | 70 |
| 7 | 15 | 85 |
| 8 | 5 | 90 |
| 9 | 5 | 95 |
| 10 | 5 | 100 |

For a 5% stockout risk, the company is prepared to run out of stock in only 5% of delivery cycles. This means it must cover 95% of occurrences, i.e., lead times up to 9 days (cumulative probability = 95%). A 10-day delivery (5% probability) is the only scenario not covered.

Step 3 — Safety Stock

Safety stock is set equal to the demand during the maximum acceptable (risk-adjusted) lead time:

Safety Stock = Maximum covered lead time × Daily usage = 9 × 150 = 1,350 batteries

Step 4 — Re-order Point

The re-order point (ROP) = Safety Stock + Demand during average lead time.

Arithmetic mean lead time = (6 + 7 + 8 + 9 + 10) ÷ 5 = 40 ÷ 5 = 8 days

Normal lead time demand = 8 × 150 = 1,200 batteries

ROP = 1,350 + 1,200 = 2,550 batteries

Conclusion: At a 5% stockout risk level, the Safety Stock = 1,350 batteries and the Re-order Point = 2,550 batteries.

Answer: (C) ₹9,45,000

Step 1 — Determine Safety Stock at 25% Stockout Risk

Daily usage = 54,000 batteries ÷ 360 days = 150 batteries/day. Normal lead time = 6 days.

Cumulative delivery probabilities:
- ≤ 6 days: 70% → stockout risk = 30% (exceeds 25% limit)
- ≤ 7 days: 85% → stockout risk = 15% (within 25% limit)

To achieve at most 25% stockout risk, we must hold enough stock to cover a 7-day lead time.

Safety Stock = (7 − 6) × 150 = 150 batteries

Step 2 — Ordering Cost

Orders per year = 10 (given). Ordering cost = 10 × ₹9,000 = ₹90,000

Step 3 — Carrying Cost

Order quantity = 54,000 ÷ 10 = 5,400 batteries per order

Average inventory = (5,400 ÷ 2) + 150 = 2,700 + 150 = 2,850 batteries

Carrying cost per battery per year = ₹800 × 37.50% = ₹300

Total carrying cost = 2,850 × ₹300 = ₹8,55,000

Total Cost = ₹90,000 + ₹8,55,000 = ₹9,45,000