Question
v) Microphone circuit Ltd. produces electronic circuits for telephones. For the coming year, marketing department has estimated a demand of 20,000 units at a price
v)
Microphone circuit Ltd. produces electronic circuits for telephones. For the coming year, marketing department has estimated a demand of 20,000 units at a price of Rs. 135 in local market. For 20,000 units of output cost accounting department has prepared following estimates:
Items | Cost Behaviour | Total Cost | Unit Cost |
Direct materials | 100% variable | Rs. 600,000 | Rs. 30 |
Direct labour | 100% variable | 500,000 | 25 |
Factory overhead: |
|
|
|
Indirect materials | 90% variable | 100,000 | 5 |
Supervision | Fixed | 240,000 | 12 |
Other indirect labour | Fixed | 80,000 | 4 |
Electricity | 70% variable | 40,000 | 2 |
Depreciation | 75% variable | 20,000 | 1 |
Repair & maintenance | 60% variable | 60,000 | 3 |
Miscellaneous | 20% variable | 160,000 | 8 |
Selling overhead | 10% variable | 140,000 | 7 |
Administrative overhead | 10% variable | 200,000 | 10 |
Total |
| 2,140,000 | 107 |
An importer of the circuits from Canada has requested for the supply of 30,000 circuits during the next year at a price of Rs. 125. The above cost behaviour is for a variation of 40% above or below the estimated output.
Required:
Calculate for management unit cost for 30,000 units of output.
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