22 December 2009
Can any one please help me to solve the given problem?:
The yield of certain process is 85%, by product is 10% and normal loss is 5% of its main product. 10,000 units of materials are put in the process and its cost is Rs.30/unit and other expenses amounted to Rs.25,400, 30% of which was accounted for by power cost. It is the practice of the company that the power cost is chargeable to the main-product and the by-product in the ratio of 5:3. The cost of the by-product is?
24 December 2009
Actually the cost of material as well as other expenses (except power expenses) should be divided in the ratio 85:10 since 5% is normal loss. Cost of raw material 300000x10/95=31579 Cost of Power 25400x.3x3/8 = 2858 Cost of other exp. 25400x.7x10/95= 1872 Total cost of by-product =36309
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