Question
Consider the following statements: (a) Factor
cost in the production is incurred on the various factors of indirect taxes rates in the economy. (b) Market cost in production is an incurred cost on rent, power and interest of loan. Which of the statements given above is/are incorrect?Solution
Cost Income of an economy, i.e., value of its total produced goods and services may be calculated at either the āfactor costā or the āmarket costā. There is a difference between them. In general, they are also called āfactor priceā and āmarket priceā. India officially used to calculate its national income at factor cost. Since January 2015, the CSO has switched over to calculating it at market price ā Statement 1 incorrect: Factor cost is the āinput costā the producer has to incur in the process of producing something (such as cost of capital, i.e., interest on loans, raw materials, labour, rent, power, etc.). This is also termed as āfactory priceā or āproduction cost/priceā. This is nothing but the āpriceā of the commodity from the producerās side. ā Statement 2 Incorrect: Market cost is derived after adding the indirect taxes to the factor cost of the product. It means the cost at which the goods reach the market, i.e., showrooms The formula to calculate is Market Cost= Factor Cost ā Subsidies + Indirect Taxes
XYZ Ltd has the following financial data:
⢠Inventory Holding Period: 90 days
⢠Receivables Collection Period: 60 days
⢠Paya...
Byron Ltd reported 32000 in earnings during the current financial year. The total shares outstanding are 40000 at a market price of 18 per share. What i...
A firm has the following details:
⢠Raw material holding: 25 days
⢠WIP: 15 days
⢠Finished goods: 20 days
⢠Receiva...
Read the following information to answer the below questions:
A director is appointed in _______
When will a person, who opted Composition Levy, have to pay tax in GST?
Under Income tax, how much deduction is allowed for tuition fee of children?
Calculate Cash ratio of the company?
The payback technique is especially useful during the time ________.
Gamma Textiles Ltd. manufactures a single product with the following cost structure:
⢠Selling Price per unit: ā¹500
⢠Variable Cost ...