Question 2 (a) Kidz Company manufactures and sells two models of baby toys namely, Max and Pro. During the Financial Year 2024-25, 1,500 units of Max and 3,600 units of Pro were manufactured. However, only 60% of Max and 80% of Pro were sold during the year. Labour cost per unit of Max is two times that of Pro. There was no opening stock of finished goods or work-in progress. The cost particulars of the two models of Baby Toys are given below: Particulars Max (`) Pro (`) Total (`) Material Cost 42,000 63,000 1,05,000 Labour Cost - - 1,21,000 Further, the cost controller of the factory informed that: • Works overhead is 50% of labour cost • Office overhead is recovered at 20% of works cost. • Selling and distribution overhead is ` 20 and ` 30 per unit sold for Model Pro and Model Max respectively. Required: (i) Prepare a cost sheet for the financial year 2024-25, showing the various elements of cost for each model of Baby Toys (Prime cost, work cost, cost of production, cost of goods sold and cost of sales). (ii) Calculate the per unit selling price of each model of Baby Toys if profit is charged at 20 percent on sales. (7 Marks) (b) A plastic manufacturing company is operating with an employment of 128 skilled workers. The product is in great demand. The company desires to increase production to meet market demand but is short of skilled workers. The company finds extremely difficult to find new skilled workers to fulfil its demands. The company is considering the introduction of an incentive scheme – either Halsey scheme (with 50% bonus) or Rawan scheme of wage payment for increasing the labour productivity to cope up the increasing demand. The company believes that if the proposed incentive scheme could bring about an average 15% increase over the present earnings of the workers, it could act as sufficient incentive for them to produce more with increased efficiency. The following data is worth consideration, in measuring the increase in productivity for the month of April 2025. Hourly rate of wages (guaranteed) ` 30 Maximum time allowed to produce one unit by one worker 2.5 hours Number of working days in the month 25 Number of workers hours per day of each worker 8 Actual production during the month (units) 12,500 Required: (i) Calculate the effective rate of earnings under the Halsey scheme and the Rowan scheme. (ii) Calculate the increased labour efficiency on introduction of the incentive schemes. (iii) Calculate the savings to the plastic company in terms of direct labour cost per unit under both the schemes. (iv) Advise the company about the selection of the scheme to fulfil their assurance. (7 Marks)