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Railways NTPC (Technical Ability) Engineering Mechanics and Strength of Materials Question Bank Engineering Mechanics

  • question_answer
               For a product, the direct labour cost is Rs. 5 and direct materials cost is Rs. 10. The annual cost of direct materials is expected to be Rs. 2,00,000 and the annual overhead to be absorbed is Rs. 1,20,000. The total cost of the product will be:                        

    A) Rs. 16               

    B) Rs. 18           

    C) Rs. 19               

    D) Rs. 21          

    Correct Answer: D

    Solution :

    Number of products made annualy \[=\frac{Annual\,\,cost\,\,of\,\,direct\,\,materials}{Direct\,\,materials\,\,\cos t}=2,00,000/10\]                          = 20,000 Total cost of product = Direct labour cost + direct materials cost + overhead cost per unit \[5+10+\frac{1,20,000}{20,000}\] \[=\text{ }5\text{ }+\text{ }10\text{ }+\text{ }6\text{ }=\text{ }Rs.21\]


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