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?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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