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House it Co produces rabbit hutches. It is about to launch a new top of the range hutch which it believes can be hold for S125, House it Co demands a margin of 25% on sales
Cost information for the new hutch is as follows:
Timber – The hutch needs 10 metres (m) of good quality planed timber.
House it Co can acquire this at a cost of $48.
Felt roofing material – 2m are required. Roofing material costs $17.50/m
Wire – 1 m of wire is needed at a cost of $1.50 per metr
Labour – Labour is paid at a rate of $7 / hour,
Variable overhead – These will be incurred at a rate of $1.50 per labour hourS
Required
What is the expected cost to make the hutch?
O $93.00
O $98.50
O $101.50
O $125.00According to them correct answer is $ 101.50
There is no information for the labor hours being 2 hours so how come they derived the answer to be $ 101.50
Thank u in advance
It would seem that there is something missing from the question.
Where did you find this question? If it is from a past exam or from the BPP Revision Kit, then let me know and then I can check.
Sir, i found this question in one of the telegram groups so i don’t know the exact source.. ;(
Well I certainly would not waste time on questions you find online, especially if they do not have answers!!
The only way to pass the exam is to buy a Revision Kit from one of the ACCA Approved Publishers. It is full of past exam and other exam standard questions for practice (and has answers and explanations!).
Yes sir i always refer your videos and notes along with the BPP text and also give online mock tests provided on the OpenTuition website. Thank u so much sir for such amazing lectures and notes.
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