Question

Job No. 1001 was in process at the end of the accounting period. The total cost involved in the job is ₹ 15,000 of which ₹ 5,000 is direct material. Factory overhead is allocated to goods in process at 150% of direct labour cost. The amount of direct labour charged to Job No. 1001 will be:

• A. ₹ 9,000
• B. ₹ 4,000
• C. ₹ 3,000
• D. ₹ 2,000

Hint:

Overhead % is always on direct labour — solve step by step!

Answer 1

The Correct Option is C

Given: Total cost = ₹ 15,000
Direct material = ₹ 5,000
Factory overhead is 150% of direct labour cost.
Let direct labour cost be ₹ X.
Then, factory overhead = 150% of X = 1.5X.
Total cost = Direct Material + Direct Labour + Factory Overhead
So, ₹ 15,000 = ₹ 5,000 + X + 1.5X
Combine terms: ₹ 15,000 = ₹ 5,000 + 2.5X
So, 2.5X = ₹ 10,000
Therefore, X = ₹ 4,000
Oops! But this suggests ₹ 4,000 — wait! Let’s double-check: 
₹ 5,000 (Material) + X (Labour) + 1.5X (Overhead) = 15,000
So: 5,000 + 2.5X = 15,000 → 2.5X = 10,000 → X = 4,000
So the amount of direct labour charged is ₹ 4,000 — therefore the correct answer is (B) ₹ 4,000.
(Note: The original options show ₹ 4,000 as (B), so we choose that.)
Correct Answer: (B) ₹ 4,000