Accounting 9706 · AS & A Level · Costs and cost behaviour

Costs and cost behaviour — practice question

For output of $50\,000$ units, a business has prepared the following budgeted figures. Costs: - direct production cost: $300\,000$ - indirect labour: $20\,000$ - factory supervisor salaries: $60\,000$ - sales staff salaries: $70\,000$ - depreciation on machinery for production: $80\,000$ - depreciation on motor vehicles for delivery: $50\,000$ - administrative expenses: $360\,000$ - total costs: $940\,000$ To set the selling price, the business adds $40\%$ to the cost of production. What is the total selling price of $500$ units?

  • A$4200
  • B$5600
  • C$6440
  • D$7140

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