Answer to Question #344809 in Management for SALOMI DAGGUPATI

Question

a) The production costs of a factory are given as follows:

Rupees

Direct Wages 90,000

Direct Materials 1,20,000

Production Overheads: Fixed 40,000

Variable 60,000

During the forthcoming year it is anticipated that:

a) Average rate for direct labour remuneration will fall from Rs.0.90 per hour

to Rs.0.75 per hour.

b) Production efficiency will be reduced by 5%.

c) Price per unit of direct material and of other materials and services which

comprise overheads will remain unchanged.

d) Direct labour hours will increase by 33.33%. Draw up a budget.