17 March 2010
Production Cost would be as under: Summation of the following: 1) RM consumed 2) Direct Labour 3) Indirect Labour connected with Production process i.e. managers and seniors who don't work on the shop floor 4) Direct Expenses like Power, Gas etc 5) Indirect Expenses connected with Production process
Divide this in the ratio of the Production sold during the period. i.e. Adjust for inventory. or add: Closing Stock and reduce the closing stock from the above.
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