Shastri Bicycle of Bombay, India, produces an inexpensive, yet rugged, bicycle for use on the city’s crowded streets that it sells for 767 rupees. (Indian currency is denominated in rupees, denoted by R.) Selected data for the company’s operations last year follow:
Units in beginning inventory 0
Units produced 17,000
Units sold 14,000
Units in ending inventory 3,000
Variable costs per unit:
Direct materials R 120
Direct labor R 400
Variable manufacturing overhead R 65
Variable selling and administrative R 25
Fixed costs:
Fixed manufacturing overhead R 880,000
Fixed selling and administrative R 680,000
Assume that the company uses absorption costing. Compute the unit product cost for one bicycle
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