Question

The cost of making an umbrella is divided between material, labour and overheads in the ratio $$6 : 4 : 1$$. If the material costs ₹132, find the cost of production of an umbrella.

Answer 1

Let the costs of material, labour and overheads be $$6x$$, $$4x$$ and $$1x$$ respectively.

Total cost of production = $$6x + 4x + 1x = 11x$$.

Cost of material = $$6x = \text{₹ } 132$$.

$$x = \frac{132}{6} = 22$$ 

Total cost = $$11 \times 22 = \text{₹ } 242$$.

Therefore, the cost of production of an umbrella is ₹ 242.