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

Costs and cost behaviour — practice question

Rodriguez Limited runs a manufacturing operation that makes two products, Product X and Product Y. The budgeted figures for the next month are given below.
(a(i))[2]

Calculate the unit contribution, in dollars, for each product.

(a(ii))[2]

Calculate the total direct labour hours needed to satisfy budgeted output.

(b)[7]

Calculate the maximum profit that can be achieved from the total direct labour hours available.

(c(i))[10]

Evaluate the choices open to the company for achieving the budgeted production. Support your answer with calculations.

(c(ii))[3]

Recommend which option the company ought to select. Justify your response.

(d(i))[3]

State three benefits of budgetary control.

(d(ii))[3]

State three drawbacks of budgetary control.

Worked solution & mark scheme

This 30-mark question has a full step-by-step worked solution and mark scheme. One marking point: Contribution for X per unit = $8

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