BUSINESS ADMINISTRATION
ACCOUNTING FOR MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The Bees Company expects to sell 25, 000 products at €40 per product. 2kg materials at €4 per kg is required for producing one product. The annual fixed costs are €100, 000. The reported actual number of sales is 25, 500 units. The actual quantity used per product is 1 KG at €6. The flexed budget profit is
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750, 000
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665, 000
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700, 000
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716, 000
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Explanation:
Detailed explanation-1: -Fixed cost = Total cost of production-(Variable cost per unit x number of units produced)
Detailed explanation-2: -Here is the formula broken down: Cost per unit = (Electricity + Rent + Labor + Raw materials) / Number of units.
Detailed explanation-3: -Cost of goods sold (COGS) is calculated by taking the value of inventory at the beginning of the period being studied, adding the cost of any new inventory purchased over the covered period, and subtracting the value of inventory held at the end of the period.
Detailed explanation-4: -The total product cost formula is Total Product Cost = Cost of Raw Materials + Cost of Direct Labor + Cost of Overhead. Another useful measure is the production cost per unit.
There is 1 question to complete.