1. A certain product can be made either by hand or by mass production. In the first method the time taken is 2 hours and overheads are 40% of the labour cost. In the second method, the time taken is 15hours/100 products and overheads are 140% of the labour cost. The material cost of each product is Rs.1.50 and rate of labour/hour is 80 paisa in each case. Estimate which of the two methods will be more economical.
1. A certain product can be made either by hand or by mass production. In the first method the time taken is 2 hours and overheads are 40% of the labour cost. In the second method, the time taken is 15hours/100 products and overheads are 140% of the labour cost. The material cost of each product is Rs.1.50 and rate of labour/hour is 80 paisa in each case. Estimate which of the two methods will be more economical.
Chapter5: Process Costing
Section: Chapter Questions
Problem 1PA: The following product Costs are available for Haworth Company on the production of chairs: direct...
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