Costing To manufacture 500,000 TBS, the direct material cost per item is AED 120 and material scrap is estimated to be 3.5% of the material costs. The direct labour costs total AED 250,000 and the...

Costing


To manufacture 500,000 TBS, the direct material cost per item is AED 120 and material scrap is estimated to be 3.5% of the material costs. The direct labour costs total AED 250,000 and the labour scrap rate is 3% of direct labour cost. The variable overheads are 75 - 80% of direct labour costs and the fixed overloads are 30 - 40% of the variable costs. Packaging, tooling and freight costs are 7.5% of manufacture costs. The company requires a profit of 45% to be successful. Calculate the selling price for one unit of TBS.