Calculate overhead rates based on last year's data.

Here's the solution for question 22: a. Cost Sheet Step 1: Calculate overhead rates based on last year's data. First, we determine the prime cost and factory cost for the last year to calculate the overhead rates. Prime Cost (Last Year): Direct Materials + Direct Wages = Rs. 1,20,000 + Rs. 80,000 = Rs. 2,00,000 Works Overhead (Factory Overhead) Rate: Works overhead is based on prime cost. Rate = Factory OverheadPrime Cost × 100 = Rs. 60,000Rs. 2,00,000 × 100 = 30\% of Prime Cost Factory Cost (Last Year): Prime Cost + Factory Overhead = Rs. 2,00,000 + Rs. 60,000 = Rs. 2,60,000 Office and Selling Overhead Rate: Office and selling overhead is based on factory cost. Total Office and Selling Overhead = Office Overhead + Selling Overhead = Rs. 50,000 + Rs. 40,000 = Rs. 90,000 Rate = Total Office and Selling OverheadFactory Cost × 100 = Rs. 90,000Rs. 2,60,000 × 100 = (9)/(26) × 100 ≈ 34.615\% of Factory Cost Step 2: Prepare the Cost Sheet for the coming product. Using the estimated direct costs and the calculated overhead rates: Direct Materials: Rs. 50,000 Direct Wages: Rs. 30,000 Prime Cost: Rs. 50,000 + Rs. 30,000 = Rs. 80,000 Add: Works Overhead (30% of Prime Cost): 0.30 × Rs. 80,000 = Rs. 24,000 Factory Cost: Rs. 80,000 + Rs. 24,000 = Rs. 1,04,000 Add: Office and Selling Overhead ((9)/(26) of Factory Cost): (9)/(26) × Rs. 1,04,000 = Rs. 36,000 Cost of Sales (Total Cost): Rs. 1,04,000 + Rs. 36,000 = Rs. 1,40,000 The cost sheet for the coming product is: |l|r| Particulars & Amount (Rs.) \\ Direct Materials & 50,000 \\ Direct Wages & 30,000 \\ Prime Cost & 80,000 \\ Add: Works Overhead (30\% of Prime Cost) & 24,000 \\ Factory Cost & 1,04,000 \\ Add: Office and Selling Overhead (9/26 of Factory Cost) & 36,000 \\ Cost of Sales (Total Cost) & 1,40,000 \\ b. Tender Price Step 3: Calculate the Tender Price. The company wants to yield a profit of 25% on the selling price. Let the Selling Price (Tender Price) be S. Profit = 0.25S Cost of Sales = Selling Price - Profit Cost of Sales = S - 0.25S = 0.75S We know the Cost of Sales is Rs. 1,40,000. Rs. 1,40,000 = 0.75 × S S = Rs. 1,40,0000.75 S = Rs. 1