If Estimated Direct Raw Materials and Direct Labour Costs Are

question 14

Multiple Choice

If estimated direct raw materials and direct labour costs are $42 000 in total, what is the direct cost per unit if forecast production is 6000 units?

• A) $7
• B) $8
• C) $14
• D) $18

---

Definitions:

Total Revenue

The total receipts from sales of goods or services before any expenses are deducted.

Price

The amount of money required to purchase a product or service, set by the interaction of supply and demand.

Perfectly Elastic

A market situation where a small change in price leads to an infinite change in the quantity demanded or supplied.

Supply Curve

A graph depicting the relationship between the price of a good and the quantity of the good that suppliers are willing and able to sell, typically upward sloping.