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CUI Clothing Pvt Ltd. A typical batch of 1000 shirts requires three main processes. First Cutting, Stitching and last one Packing. Typically a shirt requires 2 meters of cloth, costing 50 per meter. The labor cost for cutting is 50,000, while FOH is 100,000. at the end of the cutting process, there are two end products first one is processed cloth and cloth trim. The volume ratio is CLoth 90% and trimming 10%. W.R.T the market price the timing can only be sold for 5 % of the processed cloth.
Problem 1: Based upon the volume/production output, the value of the cloth trim and processed cloth should be:
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