Question

10. The following are derived from the records of a factory:
Materials issued--Rs. 64000
Wages Paid--Rs. 56000
Factory Overhead 60% of wages
Materials returned to stores Rs 800
Materials transferred to other jobs-- Rs. 400
10% of the production has been scraped as bad and a further 20% has been brought up to the specification by increasing the factory overheads to 80% of wages. If the scrapped production
fetches only 470 Rs., find the cost of production where output is 100 units.​

Answer 1

Answer:

particular total cost cost per unit

material issued 6400

-material returns (800)

-material transfers (400)

material consumed 62800 100

+wages paid 56000

prime cost 118800 100

factory overhead:-

.factory overhead 60%

of wages (56000×60%) 33600

.Additional overhead

(20% of output on 20%

of wages) 2240

-scrape material 10% (470) (10)

cost of production 154170 90

working note:-

1.production cost per unit = 154170÷90 = 1713

2. Factory 60% of wages 20%×20%×5600 =2240