A manufacturer produces 2,00,000 units of a product at a cost of ₹3.25 per unit. Later on, he produces 2,75,000 units at a cost of ₹3.20 per unit, when its fixed overheads have increased by 10%. Marginal cost per unit an

CS Executive · Cost and Management Accounting · PYQS · December 2015
A manufacturer produces 2,00,000 units of a product at a cost of ₹3.25 per unit. Later on, he produces 2,75,000 units at a cost of ₹3.20 per unit, when its fixed overheads have increased by 10%. Marginal cost per unit and original fixed overheads will be —
(A) ₹2 and ₹45,000 respectively
(B) ₹4 and ₹47,000 respectively
(C) ₹3 and ₹50,000 respectively
(D) ₹5 and ₹45,000 respectively.

Answer & Explanation:

Correct Answer: Option (C)

Official answer key: (C).

Topics: Cost Classification / Cost Behavior

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