Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

A bakery makes $1000$ muffins each day. The direct costs in total are shown below. direct materials: $1800$ direct wages: $600$ For every batch of $50$ muffins, an oven has to be set up. Each oven set-up costs $\$40$. Production overheads are equal to $20\%$ of direct wages. The bakery wants a profit margin of $25\%$. What is the selling price of one muffin?

  • A$\$3.41$
  • B$\$4.15$
  • C$\$4.43$
  • D$\$6.03$

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