A radio manufacturer finds that while it costs ₹6.25 per unit to make a component, the same is available in the market at ₹5.75 each. Continuous supply is also fully assured. The break-up of costs per unit is as follows:
CS Executive · Cost and Management Accounting · PYQS · December 2016
A radio manufacturer finds that while it costs ₹6.25 per unit to make a component, the same is available in the market at ₹5.75 each. Continuous supply is also fully assured. The break-up of costs per unit is as follows: Materials : ₹2.75 Labour : ₹1.75 Other variable expenses : ₹0.50 Depreciation and other fixed costs : ₹1.25 The best option for the manufacturer will be —
Answer & Explanation:
Correct Answer: Option (A)
Official answer key: (A).
Topics: Management Accounting
Related Questions in this Topic
- Which of the following is not an objective of management accounting?
- Management reporting is the instrument for:
- __________ is not included in tools and techniques of Management Accounting.
- 'Cost benefit analysis' falls under:
- Based on cost accounting information, which is the tool of Management Accounting for decision-making?