Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

A production run of soft drinks has a direct materials cost of $10 000 for 50 000 cans. It needs 60 direct labour hours, with direct labour costing $40 per labour hour. Overheads are absorbed at 250% of the direct labour cost. Calculate the cost per soft drink can, to the nearest dollar.

  • A$0.20
  • B$0.37
  • C$0.44
  • D$1.04

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