Accounting Multiple Choice Question – 4 April 2023

The costs of manufacturing a component are:

• direct labour – £100
• direct materials – £400
• prime cost – £500

The company overheads apportioned to the component are £150.

The component can be purchased from another company at £600.

What is the minimum cost of one extra component?

Select ONE answer:

1. £400
2. £500
3. £600
4. £650

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 2

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

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