V Ltd. has furnished the following cost data for 600 units (which is its 50% capacity) of its product: Variable overhead costs Rs.3,00,000 Fixed overhead costs Rs.5,00,000. The total cost for 950 units is?
a) Rs. 7,00,000
b) Rs. 6,50,000
c) Rs. 9,75,000
d) Rs. 6,00,000
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Answer:
Total cost of 950 Units
Variable Cost= 4,75,000 (W.N.1)
Fixed Cost= 5,00,000
Total Cost= 9,75,000 (475000+500000)
Explanation:
W.N.1
Variable cost for 950 unit= 3,00,000/600=500
= 500*950= 4,75,000
Fixed cost: It will remain fixed at 5,00,000 irrespective of change in Units.
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