Accounting Multiple Choice Question – 15 November 2021

The following information relates to a unit of production:

• selling price  —  £12
• direct labour  —  £3
• direct materials  —  £1
• fixed overhead allocation  —  £5

Variable costs are set to increase by 10 %.

What is the new contribution per unit?

Select ONE answer:

1. £2.10
2. £2.60
3. £7.60
4. £7.70

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 3

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

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