Traditional Costing

2) A manufacturing company recorded the following costs in March for Product M:
Direct Materials – £18,000
Direct Labour – £4,700
Variable Production Overhead – £3,200
Fixed Production Overhead – £17,200
Variable Selling Costs – £3,700
Fixed Distribution Costs – £14,500
Total Costs – £61,300

During March 3,000 units of Product M were produced but only 1,700 units were sold. At the beginning of March there was no inventory.
The value of the inventory of Product M at the end of March using absorption costing was:

3) A business manufactures a single product which it sells for £60. The budgeted data are as follows:
Production and sales volume – 1,500 units
Material Costs – £10,250
Direct Labour Cost – £7,800
Production Overhead – £30,250
Non-Production Overhead – £21,500

Actual production volume and costs were as budgeted but the actual sales volume achieved was 1,300 units. There was no inventory at the beginning of the period.
What is the profit for the period using absorption costing?

4) An organisation uses absorption costing. The budgeted fixed production overheads for the company for the latest year were $300,000 and the budgeted output was 200,000 units. At the end of the company’s financial year the total of the fixed production overheads was $210,000 and the actual output achieved was 150,000 units.

The under/over absorption over overheads was:

5) Which of the following is an advantage of using Absorption Costing?

6) A manufacturing company recorded the following costs in March for Product M:
Direct Materials – £18,000
Direct Labour – £4,700
Production Overhead – £20,400
Non-Production Overhead – £18,200
Total Costs – £61,300

During March 2,000 units of Product M were produced but only 1,700 units were sold. At the beginning of March there was no inventory.
The value of the inventory of Product M at the end of March using marginal costing was:

7) Using full cost pricing, what is the selling price of the following product?
Direct Material – $18
Direct Labour – $12
Variable Production Overhead – $15
Fixed Production Overhead – $20
Mark up – 20%

8) Using the information below:
Direct Material – $18
Direct Labour – $12
Variable Production Overhead – $15
Fixed Production Overhead – $20
Mark up – 20%
What is the selling price of the production using Marginal cost plus pricing?