Question
XYZ Ltd. has overheads of ₹5,00,000 allocated to 4
activities: Machine setup (₹1,50,000), Quality control (₹1,00,000), Material handling (₹1,50,000). If Product A requires 30 setups, 50 inspections, 200 material moves, total 200 setups, 500 inspections, 1,000 moves, compute overheads allocated to Product A.Solution
Rates: Setup = 1,50,000/200 = 750 per setup × 30 = 22,500. QC = 1,00,000/500 = 200 × 50 = 10,000. Material handling = 1,50,000/1,000 = 150 × 200 = 30,000. Total = 62,500.
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