Homework Answers
| External Price | 234,000 | |
| Less: | Direct Material | 144,000 |
| Direct Labor | 36,000 | |
| Variable Overhead | 18,000 | |
| Fixed Overheads | 36,000 |
Therefore (b) 36,000 is the fixed overhead for making the product. Avoidable cost of INR 12,000 is not considered as the same is not bought externally and doesn't make a difference in case of making the product.
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