The cost of manufacturing 5,000 units of a commodity comprises: Materials: ₹20,000 Wages: ₹25,000 Chargeable expenses: ₹400 Fixed factory overheads: ₹16,000 Variable factory overheads: ₹4,000 For manufacturing every 1,00
CS Executive · Cost and Management Accounting · PYQS · June 2014
The cost of manufacturing 5,000 units of a commodity comprises: Materials: ₹20,000 Wages: ₹25,000 Chargeable expenses: ₹400 Fixed factory overheads: ₹16,000 Variable factory overheads: ₹4,000 For manufacturing every 1,000 extra units of the commodity, the cost of production increases as follows: Materials: Proportionately Wages: 10% less than proportionately Chargeable expenses: No extra cost whatsoever Fixed factory overheads: ₹200 extra Variable factory overheads: 25% less than proportionately Calculate the estimated cost of producing 8,000 units of the commodity and show by how much it would differ if a flat rate of factory overheads based on wages were charged.
Topics: Cost Estimation / Cost Sheet
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