CA Inter P4 · Chapter 2 · Question 10 of 12
A company purchases 5,000 kg of a chemical at ₹42 per kg and pays freight inward of ₹6,000. A normal loss of 4% occurs due to evaporation in storage. The cost per kg of the chemical to be used for pricing issues is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) ₹45.00
Explanation
Total cost = 5,000 x ₹42 + ₹6,000 = ₹2,16,000. Normal loss is absorbed by the good units, so good quantity = 5,000 x 96% = 4,800 kg. Cost per kg = ₹2,16,000 / 4,800 = ₹45.00.
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