The cost of an article at the capacity level of 5,000 units is given under A...
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The cost of an article at the capacity level of 5,000 units is given under A below. For a variation of 25 per cent in capacity above or below this level, the individual expenses vary as indicated under B below: Particulars A B (per cent) Material cost $ 2,50,000 100 (variable) Labour cost 150000 100 (variable) Power 12500 80 (semi-variable) Repairs and maintenance 20000 75 (semi-variable) Stores 10000 100 (variable) Inspection 5000 20 (semi-variable) Administration overheads 50000 25 (semi-variable) Selling overheads 30000 50 (semi-variable) Depreciation 100000 100 (fixed) Total 627500 Cost per unit 125.5 Prepare the production cost budget at 4,000 units and 6,000 units. The cost of an article at the capacity level of 5,000 units is given under A below. For a variation of 25 per cent in capacity above or below this level, the individual expenses vary as indicated under B below: Particulars A B (per cent) Material cost $ 2,50,000 100 (variable) Labour cost 150000 100 (variable) Power 12500 80 (semi-variable) Repairs and maintenance 20000 75 (semi-variable) Stores 10000 100 (variable) Inspection 5000 20 (semi-variable) Administration overheads 50000 25 (semi-variable) Selling overheads 30000 50 (semi-variable) Depreciation 100000 100 (fixed) Total 627500 Cost per unit 125.5 Prepare the production cost budget at 4,000 units and 6,000 units.
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