Direct material Rs 25,000 and wages Rs 15,000 and direct expenses Rs 5,000 What would be the factory cost if factory overhead rate is 20%.

A. Rs. 45,000

B. Rs. 50,000

C. Rs. 54,000

D. Rs. 60,000

Answer: Option C

Solution(By Examveda Team)

Calculation of factory cost = (Direct material + Wages + Direct expenses) + Factory overhead rate
= (25000 + 15000 + 5000) + 20%
= 45000 + (20/100 × 45000)
= 45000 + 9000 = Rs. 54000.