A work order for 500 units of a commodity has to pass through four different machines, the machine hour rates of which are:
|
Machine No. 1 |
Rs. 1.25 |
|
Machine No. 2 |
Rs. 3.00 |
|
Machine No. 3 |
Rs. 4.00 |
|
Machine No. 4 |
Rs. 2.50 |
The following expenses have been incurred on the work order:
Materials Rs. 20,000; Wages Rs. 1,500
Machine 1 worked for 200 hours
Machine 2 worked for 300 hours
Machine 3 worked for 240 hours
Machine 4 worked for 100 hours
After the work order has been executed, materials worth Rs. 1,000 were returned to stores.
Office overheads are to be estimated at 60% of works cost; 10% of the production is going to be discarded, being unsatisfactory for which ½ of the cost can be realized from sale in the scrap market.
Find out the rate of selling price per unit if 20% profit on sale price is desired. Assume the net result output is 500 units.