Question:
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:
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A
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B
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Rs
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Material cost
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25,000
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(100% varying)
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Labour cost
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15,000
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(100% varying)
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Power
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1,250
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(80% varying)
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Repairs and maintenance
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2,000
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(75% varying)
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Stores
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1,000
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(100% varying)
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Inspection
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500
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(20% varying)
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Depreciation
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10,000
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(100% fixed)
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Administration overheads
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5,000
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(25% varying)
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Selling overheads
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3,000
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(50% varying)
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62,750
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Cost per unit
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12.55
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Find the unit cost of the product under each individual expense at production levels of 4,000 units and 6,000 units.