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PLEASE SOLVE THIS FOR ME. THANK YOU!
Tan Products Ltd makes one highly desirable fashion item, the Croissant handbag. The following cost information is available.
Per handbag ($)
Selling price 600
Direct materials (leather, thread, fastenings, linings) 100
Direct labour 75
Direct expenses 40
Production overheads – fixed 10
Production overheads – variable 15
Administration costs – fixed 20
Administration costs – variable 30
Answer the following
• What is the prime cost for each handbag?
• What is conversion cost of bag?
• What is manufacturing cost per bag?
• What is variable manufacturing cost per bag?
• What is variable cost per bag?
• What is contribution margin per bag?
• What is gross profit per bag?Please don’t expect us to solve this question for you for the following reasons:
Firstly, you must have an answer in the same book in which you found the question. You should therefore ask about whatever it is in the answer that you are not clear about and then I will explain. If you do not have an answer in the book then you are using the wrong book – you should be using a Revision Kit from one of the ACCA approved publishers. They have answers and workings.
Secondly, this is one of the most basic questions you could be asked (in fact it is far too basic to be asked in the exam). You have obviously not watched our free lectures – the lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
(I am guessing that you may have been set this as a test question. If that is the case then don’t expect us to answer your tests for you 🙂 )
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