Cost and Management AccountingQuestion 5449 of 251
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11. Healthy & Fit Ltd. manufactures & sells a single product captioned as 'Exercise bikes'. The estimated units to be sold in the last quarter of the year 2024-25 are as under: Particulars January 2025 February 2025 March 2025 Exercise bikes (in units) 1,500 1,800 1,000 The company's policy is to hold closing stock of finished goods at 20% of the expected sales volume of the succeeding month. Each unit of exercise bike requires one unit of main body with resistance system & two units of pedals. Calculate the number of pedals required to be purchased for January 2025 production.

Options

A1,560 pedals
B1,440 pedals COST AND MANAGEMENT ACCOUNTING
C3,120 pedals
D2,880 pedals
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Correct Answer

Option A1,560 pedals

All Options:

  • A1,560 pedals
  • B1,440 pedals COST AND MANAGEMENT ACCOUNTING
  • C3,120 pedals
  • D2,880 pedals

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Detailed Solution & Explanation

The number of pedals required for January 2025 production is calculated based on the production budget and the safety stock requirements:
Pedals Required=Pedals for Production+Closing Stock of PedalsOpening Stock of Pedals\text{Pedals Required} = \text{Pedals for Production} + \text{Closing Stock of Pedals} - \text{Opening Stock of Pedals}
As per the official suggested answers, the pedals required to be purchased is 1,560 pedals (Option A).
Hence, **Option A** is the correct answer.

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