Cost accounting system

The production achieved or achievable on an average over a period or season under normal circumstances taking into account the loss of capacity resulting from planned maintenance. Normal capacity is practical capacity minus the loss of productive capacity due to external factors. That is the reason why we considered 60000 units as mentioned.

Yogesh Konduri NS

Faculty

28-Oct-23 09:33

Given , Factory overheads 150000 , admin overheads of 45000 , selling overheads of 30000 are for 50000 units or for 60000 units ?

Thread Starter

Aishwarya Bogadhi

CA Inter

★ 0

28-Oct-23 19:20

In b point given indirect expenses are absorbed on the basis of normal production capacity Indirect expenses means ? Only fixed factory overheads or both fixed, variable overheads

Thread Starter

Aishwarya Bogadhi

CA Inter

★ 0

29-Oct-23 09:53

Variable overheads are always charged at actuals. Absorption is only for fixed overheads. In this question ICAI has assumed that fixed selling overheads are also for normal production capacity.. the assumption is it will sell whatever it produces

Pranay Mehta

Faculty

31-Oct-23 08:09