Tag: Flexed Budget

Accounting Multiple Choice Question – 7 November 2023

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The information below shows the annual budget for Alex Trading Ltd for production of 12,000 units of product A:

  • direct materials £30,000 
  • direct labour £25,000 
  • variable overheads £17,000 
  • fixed costs £60,000
  • total cost £132,000 

The actual production of product A is 15,000 units and Alex Trading Ltd decides to flex its budget. 

What is the revised total budgeted cost for product A?

Select ONE answer:

  1. £145,750
  2. £150,000
  3. £156,000
  4. £165,000

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 – £132k – £60k) * 15 / 12 = £90k + £60k
  3. Not correct
  4. Not correct

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