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Batch costing
Costing
How to compute the answer to point (iii)
Answers (2)
Best Answer
No. of cakes - 605 and 50 units per batch No. of batches - 605/50 = 12.1 Here Direct materials are the variable costs and are calculated partly as Rs 5000 * 12.1 But the Whole Fixed costs should be incurred even if one unit in the batch is produced So , we have to take the whole batch of 13 instead of 12.1 Hence The fixed costs - Direct wages and Oven set up costs are calculated for 13 batches Hope it's clear
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