Railways Technical Ability Production Engineering and Planning Question Bank Production Planning

  • question_answer A factory producing 150 electric bulbs a day, involves direct material cost of Rs. 250, direct labour cost of Rs. 200 and factory overheads of Rs. 225. Assuming a profit of 10% of the selling price, and selling on-cost 30% of the factory cost, what is the selling price of one electric bulb?

    A) Rs. 6.50            

    B) Rs. 12.50

    C) Rs. 18.50                      

    D) Rs. 21.00

    Correct Answer: A

    Solution :

    Production of electric bulbs per day =150 Direct material cost = Rs. 250/ Direct labour cost = Rs. 200/ Factory overhead = Rs. 225/ Profit = 10% of selling price Selling on-cost = 30% of factory cost. Selling price of one electric bulb, Factory cost = Material cost + Labour cost + overheds \[=250+200=225\] = Rs. 675/- Selling on cost \[=0.3\times 675\] = Rs. 202.5/ Total Cost\[=675+202.5\] = Rs. 877.5/ Let x = selling price per electric bulb. \[x=\frac{1}{150}\times 877.5+0.1x\] \[0.9x=5.85\] \[x=Rs.\,6.50\]

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