Factory Cost Formula

Factory Cost Formula

Factory Cost formula includes three cost Direct Labour, Direct material, Factory Overheads.

Factory Cost Formula = Direct Material + Direct Labour + Factory overhead

Example

Unit Material Cost = $7

Unit Labour Cost = $8

Factory overhead = $ 2

Solution

Factory Cost Formula = Direct Material + Direct Labour + Factory overhead

Unit Material =                      7

Unit Labour =                        8

Factory Overheads=              2

Factory Cost =                     17