The following information relates to a product : Direct materials : 10 kg @ ₹0.50 per kg. Direct labour : 1 hour 30 minutes @ ₹4 per hour Variable overheads : 1 hour 30 minutes @ ₹1 per hour Fixed overheads @ ₹2 per hour
CS Executive · Cost and Management Accounting · PYQS · December 2014
The following information relates to a product : Direct materials : 10 kg @ ₹0.50 per kg. Direct labour : 1 hour 30 minutes @ ₹4 per hour Variable overheads : 1 hour 30 minutes @ ₹1 per hour Fixed overheads @ ₹2 per hour (based on a budgeted production volume of 90,000 direct labour hours for the year) Selling price per unit : ₹17 The break-even point is —
Answer & Explanation:
Correct Answer: Option (A)
Correct answer: (A) 40,000 units. Contribution = 17−(5+6+1.5) = 4.5 per unit. Fixed overheads = 2×90,000 = 1,80,000; break-even volume = 40,000.
Topics: Marginal Costing
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