Accounting Multiple Choice Question – 24 February 2021

A company has a stock of 10,000 units of finished goods. It budgets to produce 110,000 units which, after sales, will increase its stock to 20,000 units.

The table below shows the resources required for the budgeted production, and the available resources.

Market research shows that the demand for the product will be for 90,000 units. What is the principal limiting factor in this case?

Select ONE answer:

1. direct labour
2. machine hours
3. material
4. sales

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

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