ecuriPrint Ltd produces pre-printed cheques for customers to use in automated account payable departments. The cheques include personalised customer details. A new customer has ordered a batch of 3,000 cheques. The following data illustrate SecuriPrint’s cost for a typical batch of 1,000 cheques: Variable materials Variable wages Machine set up (fixed per batch *) Design and artwork (fixed per batch *) £ 72.00 24.00 7.20 36.00 139.20 * The design and machine set up costs are fixed per batch regardless of the batch size. SecuriPrint absorbs production overhead at a rate of 10% of variable wages cost. A further 5% is added to the total production cost of each batch to allow for selling, distribution and administration overhead. SecuriPrint requires a profit margin of 40% of sales value. The selling price for a batch of 3,000 cheques should be: a) £743.40 b) £592.20 c) £579.60 d) £497.45
SecuriPrint Ltd produces pre-printed cheques for customers to use in automated account payable departments. The cheques include personalised customer details. A new customer has ordered a batch of 3,000 cheques. The following data illustrate SecuriPrint’s cost for a typical batch of 1,000 cheques:
Variable materials
Variable wages
Machine set up (fixed per batch *) Design and artwork (fixed per batch *)
£ 72.00 24.00
7.20 36.00 139.20
* The design and machine set up costs are fixed per batch regardless of the batch size.
SecuriPrint absorbs production
SecuriPrint requires a profit margin of 40% of sales value. The selling price for a batch of 3,000 cheques should be:
a) £743.40
b) £592.20
c) £579.60
d) £497.45
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