Sunny Ltd. produces two products: AA and BB. Sunny Ltd. sells each product for a price that equals full cost plus a mark- up of 15%15%. The total overheads equal £1,150,0001,150,000. Sunny Ltd. expects to produce and sell 50,00050,000 units of product AA and 20,00020,000 units of product BB. Full cost for one unit of a product is calculated by charging overheads to each type of product on the basis of direct machine hours. The costs per unit are as follows: Direct machine (1010£ per hour) Direct labor C. Direct material Product A (£) 3030 1515 1010 Product B (£) 4040 Full cost for Product BB is £7070. d. None of the answers is true. 2020 Sunny Ltd. uses the traditional cost approach method. Considering this information, which of the following statements is true? Use two decimals in your calculations. 55 a. Full cost for Product AA is £8585. b. The selling price of product AA is £80.580.5.
Sunny Ltd. produces two products: AA and BB. Sunny Ltd. sells each product for a price that equals full cost plus a mark- up of 15%15%. The total overheads equal £1,150,0001,150,000. Sunny Ltd. expects to produce and sell 50,00050,000 units of product AA and 20,00020,000 units of product BB. Full cost for one unit of a product is calculated by charging overheads to each type of product on the basis of direct machine hours. The costs per unit are as follows: Direct machine (1010£ per hour) Direct labor C. Direct material Product A (£) 3030 1515 1010 Product B (£) 4040 Full cost for Product BB is £7070. d. None of the answers is true. 2020 Sunny Ltd. uses the traditional cost approach method. Considering this information, which of the following statements is true? Use two decimals in your calculations. 55 a. Full cost for Product AA is £8585. b. The selling price of product AA is £80.580.5.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sunny Ltd. produces two products: AA and BB. Sunny Ltd. sells each product for a price that equals full cost plus a mark-
up of 15%15%. The total overheads equal £1,150,0001,150,000. Sunny Ltd. expects to produce and sell 50,00050,000
units of product AA and 20,00020,000 units of product BB.
Full cost for one unit of a product is calculated by charging overheads to each type of product on the basis of direct
machine hours. The costs per unit are as follows:
Direct machine
(1010£ per
hour)
Direct labor
C.
Direct material
Product
A (£)
3030
1515
1010
Product
B (£)
4040
Full cost for Product BB is £7070.
d.
None of the answers is true.
2020
Sunny Ltd. uses the traditional cost approach method. Considering this information, which of the following statements is
true?
Use two decimals in your calculations.
55
a.
Full cost for Product AA is £8585.
b.
The selling price of product AA is £80.580.5.
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