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Fundamentals of Management Accounting Questions 66–70 (page: 15)

Refer to the Exhibit.



Zepher Ltd. manufactures three products, which require the same type of machine. The following fixed cost and profit per unit is available:



In a period in which machine hours are in short supply, which of the following options is the rank order of production?

Answer is:

CORRECT TEXT

A company operates a full cost system of pricing. Production overheads are absorbed using a pre-determined absorption rate of £3.50 per machine hour. The direct production cost of product A is £15 per unit and it utilises 6 machine hours per unit. The mark-up for non-production costs is 10% of total production cost. The company applies a 25% mark-up on total cost for all products.

The required selling price for Product A, to two decimal places, is:

CORRECT TEXT

Refer to the Exhibit.



The following details have been extracted from the receivables collection records of SBC:

The amount budgeted to be received in September from credit sales is, to the nearest £000:

Each finished carton of product P contains 15 litres of liquid L. During the production process there is an unavoidable loss of 20% of the liquid input. The standard price of liquid L is $2 per litre.

The standard ingredient cost for liquid L shown on the standard cost card for one carton of product P will be

The following costs are incurred by a company which owns a five star hotel. Which THREE of the items would normally be classified as variable costs?