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

Costs and cost behaviour — practice question

P Limited manufactures wooden chairs at a unit cost of $\$70$ per chair. It has been asked to make a run of $1000$ wooden chairs with padded seats. For this, an extra $\$6000$ of materials is needed, together with another $500$ labour hours at $\$15$ per hour, and overheads rise by $\$2000$. Calculate the cost of the batch.

  • A$\$13\,500$
  • B$\$15\,500$
  • C$\$83\,500$
  • D$\$85\,500$

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