Costing

tha cost structure of an article, the selling price of which is Rs. 45,000 is as follows:-

                                                direct material   50%

                                                direct labour      20%

                                                overheads         30%

an increase of 15% in the cost of material and of 25% in the cost of labour is anticipated. these increased costs in relation to the present selling price would cause a 25% decrease in the amount of present profit per article.

Required to prepare:-

   1) statement of profit per article at present and,

   2) the revised selling price to produce the same % of profit to sales as before

   Ans:- 1) 15,000  2) 50,625