Multiple choice

The labour earns Rs. 45 per hour and is paid for normal 180 hours per month, but it is idle for 20 hours during the month due to power failure. Calculate the total cost of labour and allocate it.

  1. Rs. 8,000 - Allocation is as under ||| |---|---| | Total Cost|Rs. 8,000| | Direct Labour|Rs. 8,000|

  2. Total Cost - Rs. 8,100 -. Allocation is as under ||| |---|---| |Direct Labour |Rs. 7,200| |Manufacturing Overhead|Rs. 900|

  3. Total Cost - Rs. 8,100 Allocation is as under ||| |---|---| |Direct Labour |Rs. 7,400| |Manufacturing Overhead|Rs. 700|

  4. Total Cost - Rs. 7,800 Allocation is as under ||| |---|---| |Direct Labour|Rs. 7,200| |Manufacturing Overhead| Rs. 600|
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

 It is Rs 8,100/- Allocation is - Direct Labour - Rs 45 X 160 hours                                   -  Rs 7,200   Manufacturing Overhead ( idle time ) - Rs 45 X 20 hours - Rs 900   Total Cost - Rs 7,200 + Rs 900 = Rs 8,100 

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