Question

Portronics is an electrical company manufacturing switches. The manager of the company

provides you the following information relating to 20,000 switches produced during the

year 2019.

Direct Material 72000

Direct Wages 40000

Power 22000

Bad debts 4400

Indirect Wages 19800

Factory supervision 22,200

Drawings’ office salaries 7,500

Opening stock of finished goods (2,000 units) 40,000

Closing stock of finished goods (3,000 units) ?

Factory Rent 3200

Defective work 2400

Office Salaries 22400

Sales commission 3400

Sale proceeds of Scrap 1800

Repairs and depreciation 13500

Company uses FIFO method of stock valuation. You are required to prepare a cost sheet

for the year 2019 and compute the selling price per unit assuming a margin of 20% on

sales.​

Answer 1

Explanation:

if there is 20% of margin on Selling Price is given then we'll have to calculate 25% of margin on Cost Price.

Profit: 25% on cost

25/100×2,37,520

Profit: 59,380