question 3 ZCO PAST EXAM BPP EXAM KIT

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November 21, 2012 at 3:44 pm #55546
alryami2009
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why order a and order by multiply by rat of overhead although in the question its say that customer are charge the list price of drugs pluse acharge for selling and distribution so why we dont add 1200 + .11 why
November 21, 2012 at 7:05 pm #108084
John Moffat
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I assume that you are asking about part (a) (i) of the question.
Since the absorption rate is per $ of list price, you will add $0.11 for every $ of list price.
The list price is $1200 so you will add 1200x 0.11.
(Z Co is NOT a past exam question – it was invented by BPP)
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