Posted by: Pdfprep
Post Date: February 21, 2021
CORRECT TEXT
A company operates a full cost system of pricing. Production overheads are absorbed using a pre-determined absorption rate of £3.50 per machine hour. The direct production cost of product A is £15 per unit and it utilises 6 machine hours per unit. The mark-up for non-production costs is 10% of total production cost. The company applies a 25% mark-up on total cost for all products.
The required selling price for Product A, to two decimal places, is:
Answer: £49.52
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