Discussion Question

An automobile industry received an order for the production of 1,000 units of particular spare part. Following cost is incurred for the production of 1,000 units.

Direct material

Rs.20.00 per unit

Direct labour

Rs. 25.50 per unit

Predetermined Factory overhead Applied rate

200% of direct labour cost

It was reported by quality check department that 60 spoiled units were detected which can be sold as scrap for Rs.15.00 each and cost of spoiled output was Rs. 5,790.

Required:

With the help of given data answer the following.

1.      In case of Spoiled output, what will be total cost of completed units under Normal Loss?

2.      In case of Spoiled output, what will be total cost of completed units under Abnormal Loss?

3.      In case of Spoiled output, what will be cost per unit under Normal Loss?

4.      In case of Spoiled output, what will be cost per unit under Abnormal Loss?

NOTE:

Working or calculations are not required for this particular GDB. Just provide your answer (Resulting Figures) according to requirement of question.

Although calculations consider reasonable marks in assignments and papers but here in this GDB, calculations are not required so they would carry NO marks.

Your answer should simply look like this:

  1. Total cost of completed units under Normal Loss             Rs. XXX
  2. Total cost of completed units under Abnormal Loss         Rs. XXX
  3. Cost per unit under Normal Loss                                       Rs. XXX
  4. Cost per unit under Abnormal Loss                                   Rs. XXX

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