The manager of a Repair and Maintenance Department in response to a request submitted the following ...........

Costing - Phase (I & II) Methods of Costing

The manager of a Repair and Maintenance Department in response to a request, submitted the following budget estimates for his department that are to be used to construct a flexible budget to be used during the coming budget year:

Details of cost	Planned 6,000 units	Planned 9,000 units
Employee salaries	30,000/-	30,000/-
Indirect repair	40,200/-	60,300/-
Miscell. Expenses	13,200/-	16,800/-

On above basis, the employee salary, indirect repairs and miscell. expenses at 10,000 units of production will be:

30,000/-;67,000/-;18000

40,000/-;77,000/-;20000

50,000/-;87,000/-;19000

None of the above

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Explanation:

In the problem, the employee salaries are fixed as it does not change with change in production units. So, at 10,000 unit it will be 30,000/-

Indirect repairs are variable as it is same in per unit i.e. 6.7/- per unit. So, at 10,000 units it will be 6.7 x 10,000= 67,000/-

Miscell. expenses are semi-variable as it is not same in total as well as per unit. It will be divided into two parts, fixed i.e. Rs. 6000 and variable i.e. 1.2 x 10,000 = 12000/- and so total will be 18,000/-