CAF-5 · Chapter 3 · Question 6 of 10
Giga Incorporations incurs a total "Paint stirring and quality control" overhead of Rs. 50,000. This cost is driven by the number of batches. Product G-101 requires 10 batches, Product G-102 requires 8 batches, and Product G-103 requires 6 batches. How much of this overhead should be allocated to Product G-101?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Rs. 20,833
Explanation
Total batches = 10 + 8 + 6 = 24 batches. Product G-101's share of the batches is 10/24. Allocation = (10 / 24) × Rs. 50,000 = Rs. 20,833.
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