A company has four production departments. Fixed costs have been apportioned between them as follows: Department A B C D Fixed costs £20,000 £8,000 £6,000 £1,000 The time taken in each department to manufacture the company’s only product is Department Hours A 5 B 4 C 3 D 1 If the company recovers overheads on the basis of labour hours and expects to produce 1,000 units, then the fixed cost per unit is A £25 B £30 C £35 D £40

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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A company has four production departments. Fixed costs have been apportioned

between them as follows:

Department A B C D

Fixed costs £20,000 £8,000 £6,000 £1,000

The time taken in each department to manufacture the company’s only product is

Department Hours

A 5

B 4

C 3

D 1

If the company recovers overheads on the basis of labour hours and expects to produce

1,000 units, then the fixed cost per unit is

A £25

B £30

C £35

D £40

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