NM ltd. produces and sells toys using a special type of local wood.

● Standard Toy: 90,000 units sold @ Rs. 60 per unit (market price)
● Premium Toy: 10,000 units sold @ Rs. 80 per unit (market price)
● Cost information is given below:
Material
● Standard Toy: Rs. 10.80 per unit
● Premium Toy: Rs. 24 per unit
Labour:
● Standard Toy: Rs. 12 per unit
● Premium Toy: Rs. 14.40 per unit
Manufacturing overheads
● Manufacturing overheads are absorbed on the basis of units produced = Rs. 35 per unit
Selling and Admin overheads
● SAO are absorbed as a percentage of revenue: 4%

SP
Units 90000
Price 60
Sales 5400000
DM 972000
DL 1080000
Prime Cost 2052000
MO 3150000
NMO 216000
Total OH 3366000
Total Cost 5418000
Total Profit -18000
CPU 60.2
PPU
ROS -0.333333

A detailed examination of the overheads gave the following additional information

● Manufacturing overheads
o Toys are produced in batches.
▪ Standard: 500 units are produced in one batch
▪ Premium: 250 units are produced in one batch
o 40% of the manufacturing overheads are spent on machine setting.
o Rest can be absorbed on the basis of units produced

SP
Units 90000
Price 60
Sales 5400000
DM 972000
DL 1080000
Prime Cost 2052000
MO 3150000
Machine OH 1145455
Other OH 2004545
NMO 216000
SO 135860.9
AO 80139.13
TOH 3366000
TC
Profit
s. 35 per unit

PR Total
10000 100000
80 140
800000 6200000
240000 1212000
144000 1224000
384000 2436000
350000 3500000
32000 248000
382000 3748000
766000 6184000
34000 16000
76.6 136.8
0
4.25 0.258065

PR Total
10000 100000
80 140
800000 6200000
240000 1212000 Working Notes
144000 1224000 Total MO 3500000
 384000 2436000 Machine Setting OH 1400000
350000 3500000
254545.5 1400000 batches 180 40 220
95454.55 2100000 Machine OH 1145455 254545.5 1400000
32000 248000 abr 6363.636
37739.13 173600 Other MO Abr
-5739.13 74400
382000 3748000 NMO 216000 32000 248000

SDO 173600
no of visits 900 250 1150
150.9565