CA Intermediate · Cost and Management Accounting · Service Costing
Dr. Mehra's clinic has a diagnostic lab. Monthly fixed costs are Rs 90,000 and variable cost is Rs 150 per test. The lab performs 1,500 tests in a month. Total cost per test is:
Total cost per test is Rs 210. Fixed cost of Rs 90,000 spread over 1,500 tests is Rs 60 per test, and adding the variable cost of Rs 150 per test gives Rs 210.
- ARs 210Correct
- BRs 60
- CRs 150
- DRs 360
Explanation
Fixed cost per test = 90,000 / 1,500 = Rs 60. Add variable cost Rs 150 to get Rs 210. Rs 60 ignores variable cost, Rs 150 ignores fixed cost, and Rs 360 wrongly adds fixed cost per test twice-over.
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