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MC Question 1
Formulae & Tables
ACCA PM (F5) Formulae Sheet
You will get this Formula Table at the exam so learn well how to apply it in your ACCA PM (F5) Exam
A manufacturing company which produces a range of products has developed a budget for the life-cycle of a new product, P. The information in the following table relates exclusively to product P:
Lifetime total | Per unit | |
---|---|---|
Design costs | $800,000 | |
Direct manufacturing costs | $20 | |
Depreciation costs | $500,000 | |
Decommissioning costs | $20,000 | |
Machine hours | 4 | |
Production and sales units | 300,000 |
The company’s total fixed production overheads are budgeted to be $72 million each year and total machine hours are budgeted to be 96 million hours. The company absorbs overheads on a machine hour basis.
What is the budgeted life-cycle cost per unit for product P?
A. $24·40
B. $25·73
C. $27·40
D. $22·73