House Co also plans to manufacture 90 sofas in june. Below are some extracts from the cost card for a sofa.
Materials- 10m^2 of fabric @$50 per m^2. =$500
Assembly labour- 8hours @$15 per hour =$120
How many metres of fabric should be purchased if 10% of material is wasted during the production process?
Sir i know required for production is 900m^2 {90×10)
But in kit they're adding waste =100 from where is this coming from 10% of 900 would be 90, also why we adding it with usage it's like normal loss which we deduct from input to find output, please explain this sir
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Costing
4y ago#1The cost card is showing the material being used in production which is 900 m^2
For every 10 m^2 purchased, 10% is wasted and therefore only 9 is available for production.
Putting it the other way round, for every 9m^2 used in production they will need to purchase 10m^2.
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