CA Inter P4 · Chapter 5 · Question 8 of 8
Material handling costs of ₹3,60,000 are driven by 1,200 material movements. Product Z requires 85 movements during the period. The material handling cost assigned to Product Z is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) ₹25,500.00
Explanation
Cost driver rate = ₹3,60,000 / 1,200 = ₹300 per movement. Cost assigned to Z = 85 x ₹300 = ₹25,500.
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