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    Question

    A factory has direct material cost of ₹2,40,000 and

    direct labour of ₹1,60,000 for a batch of 1,000 units. Factory overheads are absorbed at 75% of direct labour. Admin overhead is charged at 20% of factory cost. Selling & distribution overheads are ₹30 per unit. What is the total cost per unit?
    A ₹580 Correct Answer Incorrect Answer
    B ₹620 Correct Answer Incorrect Answer
    C ₹654 Correct Answer Incorrect Answer
    D ₹600 Correct Answer Incorrect Answer

    Solution

    Factory cost = DM + DL + Factory OH = ₹2.4L + ₹1.6L + (1.6L × 75%) = ₹2.4L + ₹1.6L + ₹1.2L = ₹5.2L Admin OH = 20% of ₹5.2L = ₹1.04L Selling OH = 30 × 1,000 = ₹30,000 Total cost = ₹5.2L + ₹1.04L + ₹0.3L = ₹6.54L → per unit = ₹654

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