Question 5 (7 Marks)

Rimsha Toya manufacture toys and sell them throughout Pakistan. The company is developing the budget for the next month. The following estimates have been determined by management:

Budgeted sales in units 1,700 Toys Selling price per toy Rs.240 Inventory at the beginning of the month 150 toys Planned inventory at the end of the month 100 toys Direct labor hours needed to produce one toy 2 hours Direct labor wages Rs. 10 per hour Direct materials cost per toy Rs.8 Variable manufacturing overhead cost per toy Rs.6 Fixed overhead costs for the upcoming month Rs.220,000