CMA Intermediate · Cost Accounting · Operating Costing - Transport, Hotel and Healthcare
A diagnostic centre in Chennai incurred fixed costs of Rs 2,40,000 and variable costs of Rs 150 per test in a month. It performed 2,000 tests. What is the cost per test, and what would it be at 3,000 tests with the same cost behaviour?
At 2,000 tests the cost per test is Rs 270 (Rs 120 fixed plus Rs 150 variable). At 3,000 tests fixed cost spreads to Rs 80 per test, giving Rs 230. Fixed cost stays Rs 2,40,000 in total while variable cost per test is constant.
- ARs 270; Rs 230Correct
- BRs 270; Rs 200
- CRs 150; Rs 150
- DRs 240; Rs 230
Explanation
At 2,000 tests: fixed per test = 2,40,000/2,000 = 120, plus 150 = Rs 270. At 3,000 tests: 2,40,000/3,000 = 80, plus 150 = Rs 230. Rs 200 wrongly treats the fixed cost as falling proportionally to a different base.
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