A steel company has received an order for the supply of three different types of castings A,

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A steel company has received an order for the supply of three different types of castings A, B and C, weighing 36, 90 and 54 tonnes respectively. 10% of raw materials used is wasted in manufacturing and sold as scrap for 25% of its cost. The cost of raw materials is Rs. 1,000 per tonne. The wages for the three types of casting amount to Rs. 24,000, Rs. 63,000 and Rs. 33,000 respectively. The costs of the moulds for the three types of castings are Rs. 2,400, Rs. 2,000 and Rs. 1,800 respectively. Factory overheads are to be charged at 30% of wages and selling, and distribution and administration overheads at 20% of works cost.

It is desired to earn a profi t of 25% on selling price.

Ascertain the price to be charged of these different types of castings on the basis of the above information.

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Cost Accounting

ISBN: 9788131732076

1st Edition

Authors: V. Rajasekaran, R. Lalitha

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