(a) A work order for 100 units of a commodity has to pass through four different...

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(a) A work order for 100 units of a commodity has to pass through four different machines of which the machine hour rates are: Machine P-1.25, Machine Q-2.50, Machine R-3 and Machine S-2.25 Following expenses have been incurred on the work order Materials 8,000 and Wages 500. Machine - P has been engaged for 200 hours. Machine - Q for 160 hours, Machine - R for 240 hours and Machine - S for 132 hours. After the work order has been completed, materials worth 400 are found to be surplus and are returned to stores. Office overhead used to be 40% of works costs, but on account of all-round rise in the cost of administration, distribution and sale, there has been a 50% rise in the office overhead expenditure. Moreover, it is known that 10% of production will have to be scrapped as not being upto the specification and the sale proceeds of the scrapped output will be only 5% of the cost of sale. If the manufacturer wants to make a profit of 20% on the total cost of the work order, find out the selling price of a unit of commodity ready for sale. [8] (a) A work order for 100 units of a commodity has to pass through four different machines of which the machine hour rates are: Machine P-1.25, Machine Q-2.50, Machine R-3 and Machine S-2.25 Following expenses have been incurred on the work order Materials 8,000 and Wages 500. Machine - P has been engaged for 200 hours. Machine - Q for 160 hours, Machine - R for 240 hours and Machine - S for 132 hours. After the work order has been completed, materials worth 400 are found to be surplus and are returned to stores. Office overhead used to be 40% of works costs, but on account of all-round rise in the cost of administration, distribution and sale, there has been a 50% rise in the office overhead expenditure. Moreover, it is known that 10% of production will have to be scrapped as not being upto the specification and the sale proceeds of the scrapped output will be only 5% of the cost of sale. If the manufacturer wants to make a profit of 20% on the total cost of the work order, find out the selling price of a unit of commodity ready for sale. [8]