Accounting Multiple Choice Question – 16 November 2021

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Accounting
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A business produces a single product:

  • opening stock  —  5,000 units
  • production  —  15,000 units
  • closing stock  —  2,000 units

The variable production cost per unit is £10 and the fixed production cost is £60 000.

The sales revenue is £360 000.

Profit is £108 000 based on full absorption costing.

What is the profit based on marginal costing?

Select ONE answer:

  1. £8,000 Higher
  2. £8,000 Lower
  3. £12,000 Higher
  4. £12,000 Lower

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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Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

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