A product uses 6 Kilograms of raw materials and takes two direct labour hours to make. Raw materials cost $2.50 per kilogram and the direct labour is paid $4 per hour. Variable production overheads are 25% of labour costs. The budgeted fixed production costs for the year were $120,000 and budgeted direct labour hours were 20,000 hours. Fixed overheads are recovered on a direct labour hour basis. The Cost accountant would prepare a cost card to estimate the cost per unit as: a. $35 b. $25 O c. $37 $31

A product uses 6 Kilograms of raw materials and takes two direct labour hours to make. Raw materials cost $2.50 per kilogram and the direct labour is paid $4 per hour. Variable production overheads are 25% of labour costs. The budgeted fixed production costs for the year were $120,000 and budgeted direct labour hours were 20,000 hours. Fixed overheads are recovered on a direct labour hour basis. The Cost accountant would prepare a cost card to estimate the cost per unit as: a. $35 b. $25 O c. $37 $31

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Description: rch@A product uses 6 Kilograms of raw materials and takes twodirect labour hours to make. Raw materials cost $2.50 perkilogram and the direct labour is paid $4 per hour. Variableproduction overheads are 25% of labour costs. Thebudgeted fixed product

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which one is the correct answer?