Mr.Vora gave the following facts regarding his costs per case determined from the accounting data of the June – November period referred to above
Direct costs per case of 36 tins of 550 gms each
(Rs)
Material Packing tins Other packing materials, wooden case, waterproof paper, box strapping pads Direct labor* Railway freight
Overhead Costs Monthly overhead costs were stated to be as follows:
Rent Electricity and water Coal Depreciation on plant @ 6% (Rs. One lack investment) Interest on working capital
24.12 21.60 4.00
5.40 4.80 59.92
(Rs)
165.00 50.00 50.00
500.00 250.00
1015.00
Mr. Vora’s monthly wage bill was Rs.900, but the work force was used for nearly half of the time on another project in which Mr. Vora was engaged. In the light of the irregularity of production, the labour cost given is probably high as compared with what it would be if the plant were operating at or near capacity.
When this overhead was allocated against the 500 case sales of the period, the overhead costs came to Rs.12.18 per case. In the above figures, Mr. Vora did not include any salary for himself.
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