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Mohd Javed Khan (Querist)
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21 April 2010 17. (a) The Alpha Electricity Company Limited decided to replace one of its old plants with
a modern one with a larger capacity. The plant when installed in 1960 cost the
company Rs. 30 lakhs, the components of materials, labour and overheads being in
the ratio of 3 : 2 : 1. It is ascertained that the costs of materials and labour have
gone up by 25% and 50% respectively. The proportion of overheads to total costs is
expected to remain the same as before.
The cost of the new plant as per improved design is Rs. 75 lakhs and in addition,
material recovered from the old plant of a value of Rs. 3,60,000 has been used in
the construction of the new plant. The old plant was scrapped and sold for Rs.
9,00,000.
The Accounts of the company are maintained under Double Account system.
Indicate how much would be capitalised and the amount that would be charged to
revenue. Show the Ledger Accounts.

Mohd Javed Khan

Mohd Javed Khan (Querist)
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21 April 2010 Overheads (1/4 of above or 1/5 of total) 8,43,750

ye revision test paper ka question hai

Mohd Javed Khan

Mohd Javed Khan (Querist)
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21 April 2010 hiee all any one plzz tell me the calculation of overhead in this question plzz tell

in question specify that

overhead are same as before then why we take 1/4 or 1/5 plzz tell

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