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Find out the Missing figure: Prime cost ₹ 5,00,000 ; Factory overhead 50% of prime cost ; Administrative overhead ₹ 1,00,000 ; of production = ?

Accounting

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Answer

(c) ₹ 8,75,667\text{(c) ₹ 8,75,667}

Step-by-step solution

7 steps

here is the solution for question 53:

  1. Calculate the cost per unit of production.

    The total cost of production is ₹ 10,18,050 for 45,200 units.

    Cost per unit=Total Cost of ProductionUnits Produced\text{Cost per unit} = \frac{\text{Total Cost of Production}}{\text{Units Produced}} Cost per unit=₹10,18,05045,200 units\text{Cost per unit} = \frac{₹ 10,18,050}{45,200 \text{ units}} Cost per unit≈₹22.52323 per unit\text{Cost per unit} \approx ₹ 22.52323 \text{ per unit}
  2. Calculate the value of the closing stock of finished goods.

    The closing stock consists of 7,000 units.

    Value of Closing Stock=Cost per unit×Units in Closing Stock\text{Value of Closing Stock} = \text{Cost per unit} \times \text{Units in Closing Stock} Value of Closing Stock=₹22.52323×7,000 units\text{Value of Closing Stock} = ₹ 22.52323 \times 7,000 \text{ units} Value of Closing Stock≈₹1,57,662.61\text{Value of Closing Stock} \approx ₹ 1,57,662.61
  3. Calculate the Cost of Goods Sold (COGS).

    There is no opening stock of finished goods.

    COGS=Opening Stock+Cost of Production−Closing Stock\text{COGS} = \text{Opening Stock} + \text{Cost of Production} - \text{Closing Stock} COGS=₹0+₹10,18,050−₹1,57,662.61\text{COGS} = ₹ 0 + ₹ 10,18,050 - ₹ 1,57,662.61 COGS≈₹8,60,387.39\text{COGS} \approx ₹ 8,60,387.39
  4. Calculate the number of units sold.

    Units Sold=Units Produced−Units in Closing Stock\text{Units Sold} = \text{Units Produced} - \text{Units in Closing Stock} Units Sold=45,200 units−7,000 units\text{Units Sold} = 45,200 \text{ units} - 7,000 \text{ units} Units Sold=38,200 units\text{Units Sold} = 38,200 \text{ units}
  5. Calculate the total selling and distribution expenses.

    Selling and distribution expenses are ₹ 0.40 per unit sold.

    \text{Selling & Distribution Expenses} = \text{Units Sold} \times \text{Expense per unit} \text{Selling & Distribution Expenses} = 38,200 \text{ units} \times ₹ 0.40 \text{ per unit} \text{Selling & Distribution Expenses} = ₹ 15,280
  6. Calculate the Total Cost of Sales.

    \text{Total Cost of Sales} = \text{COGS} + \text{Selling & Distribution Expenses} Total Cost of Sales=₹8,60,387.39+₹15,280\text{Total Cost of Sales} = ₹ 8,60,387.39 + ₹ 15,280 Total Cost of Sales≈₹8,75,667.39\text{Total Cost of Sales} \approx ₹ 8,75,667.39
  7. Determine the Sales value.

    Since no profit margin is given, we assume Sales are equal to the Total Cost of Sales.

    Sales=Total Cost of Sales\text{Sales} = \text{Total Cost of Sales} Sales≈₹8,75,667.39\text{Sales} \approx ₹ 8,75,667.39

    Comparing this to the given options, option (c) is the closest value.

    The final answer is (c) ₹ 8,75,667\text{(c) ₹ 8,75,667}.

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