CA Intermediate · Cost and Management Accounting · Unit & Batch Costing
A firm produces 250 units in a batch. Direct materials for the batch are ₹30,000 and direct labour is ₹20,000. Overheads are absorbed at 60% of direct labour. The firm sells the entire batch at a profit of 20% on selling price. What is the selling price per unit?
The result does not reconcile.
- A₹250Correct
- B₹240
- C₹200
- D₹300
Explanation
Overheads = 60% × 20,000 = 12,000. Total cost = 30,000 + 20,000 + 12,000 = 62,000. Cost per unit = 62,000/250 = 248. Profit is 20% on sales, so price = 248/0.8 = 310. This does not match the key, so the question is unsound.
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