{"id":55666,"date":"2024-04-16T00:31:17","date_gmt":"2024-04-16T00:31:17","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=55666"},"modified":"2024-04-16T00:31:17","modified_gmt":"2024-04-16T00:31:17","slug":"direct-material-rs-25000-and-wages-rs-15000-and-direct-expenses-rs-5000-what-would-be-the-factory-cost-if-factory-overhead-rate-is-20","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/direct-material-rs-25000-and-wages-rs-15000-and-direct-expenses-rs-5000-what-would-be-the-factory-cost-if-factory-overhead-rate-is-20\/","title":{"rendered":"Direct material Rs 25,000 and wages Rs 15,000 and direct expenses Rs 5,000 What would be the factory cost if factory overhead rate is 20%."},"content":{"rendered":"

[amp_mcq option1=”Rs. 45,000″ option2=”Rs. 50,000″ option3=”Rs. 54,000″ option4=”Rs. 60,000″ correct=”option3″]<\/p>\n

The correct answer is C. Rs. 54,000.<\/p>\n

Factory overhead is the indirect costs of manufacturing a product. It includes costs such as indirect labor, indirect materials, and factory depreciation. The factory overhead rate is the percentage of direct labor cost that is allocated to factory overhead.<\/p>\n

To calculate the factory cost, we first need to calculate the total direct labor cost. This is done by adding the direct material cost, the direct labor cost, and the direct expenses. The total direct labor cost is Rs. 45,000.<\/p>\n

Next, we need to calculate the factory overhead cost. This is done by multiplying the factory overhead rate by the total direct labor cost. The factory overhead cost is Rs. 9,000.<\/p>\n

Finally, we need to add the factory overhead cost to the total direct labor cost to get the factory cost. The factory cost is Rs. 54,000.<\/p>\n

Here is a breakdown of each option:<\/p>\n