Question
What is the value of per unit of inventory if the firm uses absorption costing? Direct material cost per unit = Rs.3 Direct Labour cost per unit = Rs.4 Variable overheads are absorbed as 50% of direct labour cost Fixed production overheads = Rs.120,000 Budgeted production = 20,000 units
Solution
Absorption costing valuation of inventory = fixed cost + variable cost Here, variable cost = direct material + direct labour + variable O/H = 3 + 4 + (50% of 4) = 9 Fixed cost per unit = (Fixed production overheads/ Budgeted production) = (120000/ 20000) = 6 Â Therefore, value of inventory as per absorption costing = 9 + 6 = Rs.15 per unit
More Banking System in India Questions
- In which of the following facility the borrower can take money out as needed until the limit is reached, and as money is repaid, it can be borrowed again?
- What kind of organizational structure combines a vertical chain of command with horizontal reporting requirements?
- If a stock's expected return is 18%, the risk-free rate is 6%, and the market return is 12%, what is the stock's beta according to the CAPM?
- Which of the following Bank has been permitted to set up its subsidiary in IFSC for providing specialized services as per Union Budget 2023 announcements
- The Sustainable Development Goals (SDGs) India Index measures the Indian States on the basis of the progress made on various Sustainable Development Goals....
- The second phase of the central bank’s medium-term strategy for strengthening regulatory and supervisory mechanism Utkarsh 2.0 is launched for the time per...
- What is a Follow-on Public Offer (FPO)?
- A statement which gives organization-specific definitions of what’s expected and required with respect to the behavior and actions within the organization ...
- Under which act are hawala transactions prohibited in India?
- The RBI revised its instructions on Bulk Deposits for Urban Co-operative Banks (UCBs) in January 2024. Under this revision, what is the minimum amount cons...
