Lindsay Fabrications Limited Produces the YT32, Which Has the Following

question 1

Multiple Choice

Lindsay Fabrications Limited produces the YT32, which has the following costs:

Factory production overhead is recovered on the basis of machine hours. Each YT32 requires an input of 1.5 machine hours. The recovery rate per hour is £11.50.

The selling price of the YT32 is £62.50 per unit.
What is the contribution per unit of YT32?

• A) £32.50
• B) £25.50
• C) £8.25
• D) £14.00

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Definitions:

Market Will Bear

The maximum price that consumers are willing to pay for a product or service in a given market.

Fixed Costs

Expenses that do not change with the level of goods or services a business produces, such as rent, salaries, and loan payments.

Pen Rentals

The service of lending pens, typically for temporary use, possibly related to specific events or locations where writing instruments are required.

Monthly Profit

The net income achieved by a business over the course of a single calendar month after all expenses have been deducted from total revenue.