1. A certain product can be made either by hand or by mass production. In the first method the time taken is 2 hours and overheads are 40% of the labour cost. In the second method, the time taken is 15hours/100 products and overheads are 140% of the labour cost. The material cost of each product is Rs.1.50 and rate of labour/hour is 80 paisa in each case. Estimate which of the two methods will be more economical.
1. A certain product can be made either by hand or by mass production. In the first method the time taken is 2 hours and overheads are 40% of the labour cost. In the second method, the time taken is 15hours/100 products and overheads are 140% of the labour cost. The material cost of each product is Rs.1.50 and rate of labour/hour is 80 paisa in each case. Estimate which of the two methods will be more economical.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:1. A certain product can be
made either by hand or by
mass production. In the first
method the time taken is 2
hours and overheads are
40% of the labour cost. In the
second method, the time taken
is 15hours/100 products and
overheads are 140% of the
labour cost. The material cost
of each product is Rs.1.50 and
rate of labour/hour is 80 paisa
in each case. Estimate which of
the two methods will be more
economical.
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