Need costing

Costing

The outer casing for the TBS is manufactured in SAIL Foundries LLC which is the material manufacturing unit of KEHN Global. To manufacture 1,000,000 TBS, the direct material cost per item is AED 90 and material scrap is estimated to be 3.5% of the material costs. The direct labour costs total AED 600,000 and the labour scrap rate is 3% of direct labour cost. The variable overheads are 75 - 80% of direct labour costs and the fixed overloads are 30 - 40% of the variable costs. Packaging, tooling and freight costs are 7.5% of manufacture costs. The company requires a profit of 45% to be successful.