Question

40. If indirect materia! at 70% capacity producing 700 units are Rs. 235, of which variable
component is Re. 0.05 per unit, the amount of indirect materials at 100% capacity would be:
(a) 336 (approx.)
(b) 250
(c) 235
(d) 285​

Answer 1

Answer:

b. 250

Explanation:

any doubt i explain

Answer 2

250 is the amount of indirect materials at 100% capacity (Option b is the correct answer)

Given,

Indirect material at 70% capacity producing 700 units.

The total Cost is Rs. 235

Variable Component is Rs. 0.05 per unit

To Find,

Find the amount of indirect materials at 100% capacity

Solution,

Total Cost is Rs. 235.

Total Production Unit is 700 Rs. 0.05 per unit

so, 235-(700*0.05) = 235- 35 = 200 ____(1)

and, indirect material has 70% capacity

so, 35*100/70 = 50 ________(2)

Now, adding both the value (200+50)= 250

Hence, 250 is the amount of indirect materials at 100% capacity

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