Day: February 28, 2021

The table below shows the standard cost data relating to a product passing through two production departments. 

The standard prime cost is £20. Overheads are absorbed on the basis of direct labour hours and machine hours as appropriate.

What is the standard factory cost of the product?

Select ONE answer:

1. £26
2. £32
3. £34
4. £36

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 – £20 + (£200,000 / 100,000 * 2) + (£400,000 / 100,000 * 3)

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