BA2 Leak Questions

The following data are available for a company that produces and sells a single product.

The company’s opening finished goods inventory was 2,500 units.

The fixed overhead absorption rate is $8.00 per unit.

The profit calculated using marginal costing is $16,000.

The profit calculated using absorption costing and valuing its inventory at standard cost is $22,400.

The company’s closing finished goods inventory is:

A company absorbs production overhead using a direct labour hour rate. Data for the latest period are as follows:

What is the overhead absorption rate per direct labour hour? Give your answer to one decimal place.

A new product requires an investment of $200,000 in machinery and working capital. The total sales volume over the product’s life will be 5,000 units. The forecast costs per unit throughout the product’s life are as follows:

The product is required to earn a return on investment of 35%.

What unit selling price needs to be achieved?

A company uses standard absorption costing. Budgeted and actual data for the latest period are as follows.

What was the production overhead absorption rate per unit?