CAF-5 · Chapter 6 · Question 7 of 10
A specific job (Job 453) incurs direct materials of Rs. 10,000, direct labour of Rs. 6,000, and direct expenses of Rs. 4,000. Production overheads are charged at 150% of direct labour cost. What is the total production cost of the job?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 29,000
Explanation
Prime Cost = Direct Materials (10,000) + Direct Labour (6,000) + Direct Expenses (4,000) = Rs. 20,000. Absorbed Overheads = 150% of Direct Labour (6,000) = Rs. 9,000. Total Production Cost = Prime Cost (20,000) + Absorbed Overheads (9,000) = Rs. 29,000.
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