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Allocation of fixed cost

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Querist : Anonymous

Querist : Anonymous (Querist)

05 October 2012 Haiiii...

I am working in a manufacturing company of lighting fixtures products.Total units of production in the company is around 25000 [product A,B,c,d] units in a month.
Currently i am costing one product,Say product A .companys FC around 5,00,000 in a amonth.
My query is how to allocate that Fc to the product A
Selling price of Product A is Max: Rs.225/-

Please help me to sort out

CA. Jatin Gupta

CA. Jatin Gupta (Expert)

07 October 2012 As per AS-2 Valuation of Inventory, fixed cost should be allocated on the basis of normal capacity of production. Your fixed cost is RS 5,00,000/- and taking your 25000 units as your normal production capacity then allocation would be 20 per unit.

Querist : Anonymous

Querist : Anonymous (Querist)

08 October 2012 Firstly thank you for replying...
If we have taking product A for costing calculation and the particular product production only 2000 units a in a month
How to allocate?
is taking percentage of product A/all the products right?

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