CA Final -AMA (Old) Nov 2019 - Quesiton (Learning Curve)-Please Answer

Final 774 views 2 replies

A school wants to purchase four identical hand-crafted gifts from Sunbeam CO., to be given to Chief guest during a function. EACH Gift can be crafted by SINGLE LABOURER. Sunbeam will start the work ON THE NEXT DAY OF ORDER. The following info estimated for the first unit of gift.

Particulars                                                Rs/unit

Direct variable cost(exlcuding labour        3500

Direct LABOUR(30 HRS @ 60 per hour)    1800

Other Info:

>80% learning cruve ratio applicable to Direct labour

>Each day consist of 8 WORKING HOURS per LABOURER. No overtime allowed.

>Desired mark-up is 20% of all variable cost

Compute the minimum amount of Sunbeam can QUOTE for the 4 UNITS of the gift, if school will take delivery of the gift on 

   i. 5th day o f the order (i.e. 4 days from the commencement of the  work)

   ii. 7th day of the order

   iii. 11th day of the order

 

 

 

Replies (2)
Answer will be same under all three portion because selling price in question is variable cost plus 20% . and cost will not change whether u receive it on 5th day or 7 th day or 11 th day. it was given only to confuse student
@ Ronak learning curve effect applies and the answer changes accordingly.


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register