Shastri Bicycle of Bombay, India, produces an inexpensive, yet rugged, bicycle f

Question

Shastri Bicycle of Bombay, India, produces an inexpensive, yet rugged, bicycle for use on the city's crowded streets that it sells for 796 rupees. (Indian currency is denominated in rupees, denoted by R.) Assume that the company uses absorption costing. Compute the unit product cost for one bicycle. (Round your intermediate and final answers to the nearest whole number.) Unit product cost R. Assume that the company uses variable costing. Compute the unit product cost for one bicycle. Unit product cost

Explanation / Answer

Solution:

Cost per unit under - Absorption costing Direct Material 210 Direct Labor 370 Variablle selling manufactuirng overhead 50 Fixed manufacturing overhead - $ 910,000 / 25,000 36.4 Cost per unit 666.4 Cost per unit under - Variable costing Direct Material 210 Direct Labor 370 Variablle selling manufactuirng overhead 50 Cost per unit 630

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