Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

A company produces a single product that is sold for $\$384$ per unit. Its costs are given below: Direct materials: $4$ kilos at $\$8$ per kilo Direct labour: $8$ hours at $\$12$ per hour Selling and distribution: $\$40$ The mark-up is $50\%$. Calculate the factory overhead absorption rate per labour hour.

  • A$\$3$
  • B$\$5$
  • C$\$11$
  • D$\$22$

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