The cost of an article at capacity level of 5,000 units is given under A below. For a variation of 25% in capacity above or below this level, the individual expenses vary as indicated under B below:
|
A |
B |
|
|
Rs |
||
|
Material cost |
25,000 |
(100% varying) |
|
Labour cost |
15,000 |
(100% varying) |
|
Power |
1,250 |
(80% varying) |
|
Repairs and maintenance |
2,000 |
(75% varying) |
|
Stores |
1,000 |
(100% varying) |
|
Inspection |
500 |
(20% varying) |
|
Depreciation |
10,000 |
(100% fixed) |
|
Administration overheads |
5,000 |
(25% varying) |
|
Selling overheads |
3,000 |
(50% varying) |
|
62,750 |
||
|
Cost per unit |
12.55 |
Find the unit cost of the product under each individual expense at production levels of 4,000 units and 6,000 units.