Reference no: EM132549559

The following output levels and production costs have been recorded over the last three periods:

                         Period 1           Period 2                Period 3

Output (units)           6,940           5,750               5,100

Costs (£)                 151,278           136,570            128,536

Question 1: What will be the total costs incurred in a period when output is 6,500 units?

A £145,240

B £145,910

C £145,840

D £145,960

Question 2: A component has a safety stock of 700, a reorder quantity of 4,000 and a rate of demand which varies between 200 and 700 per week. The average stock is approximately:

A 2,000

B 2,300

C 2,700

D 2,900

Question 3: A company made 17,500 units at a total cost of £25 each. Four-fifths of the costs were variable and the remainder were fixed. 18,000 units were sold at £25 each. The company had opening stock of 3,000 units. By how much will the profit calculated using absorption costing principles differ from the profit if marginal costing principles had been used?

A The absorption costing profit would be £2,500 less

B The absorption costing profit would be £2,500 greater

C The absorption costing profit would be £3,500 greater

D The absorption costing profit would be £3,500 less

Question 4: 7702 units of a company's single product were sold for a total revenue of £166,600. Fixed costs in the period were £49,820 and net profit was £14,880.

What was the contribution per unit?

A £9·31

B £8·40

C £21·21

D £13·45

Question 5: A machine operator is paid £12.00 per hour and has a normal working week of 38 hours. Overtime is paid at the basic rate plus 44%. If, in week 9, the machine operator worked 47 hours, the overtime premium paid to the operator would be:

A £47.52

B £56.38

C £108.00

D £155.32