MENU
A company produces a single product for which the following cost data are available.
Analysis by the management accountant has shown that 100% of direct material cost and 50% of direct labour cost are variable costs. 50% of production overhead and 100% of selling and distribution overhead are variable costs.
What is the marginal cost per unit?
Suggested Answer: B
Get Premium CIMAPRA17-BA2-1 Questions
as Interactive Web-Based Practice Test or PDF
Real Exam Format
Detailed Explanations
Instant Access
Get Your Practice Test
34 comments · newest first
BO
Bonita
11 months ago
Definitely $7, I did the calculations!
AM
Ammie
11 months ago
Wait, how can selling overhead be fully variable?
SE
Selma
11 months ago
Not sure about that, could be $9 instead.
LO
Long
12 months ago
I think the marginal cost is $8.
CL
Claribel
12 months ago
Direct material is fully variable, right?
ES
Estrella
1 year ago
I’m leaning towards option C, $8, but I’m not entirely confident. I hope I calculated the variable costs right!
BE
Bernadine
1 year ago
I feel like I might be mixing up the percentages for direct labor and overheads. Did we apply the same percentages in our practice questions?
OL
Olen
1 year ago
I think we practiced a similar question where we had to calculate variable costs. If I recall, we need to add up the variable portions of each cost category.
OR
Oretha
1 year ago
I remember that marginal cost includes only variable costs, but I'm not sure how to break down the overheads correctly.
CA
Carlee
1 year ago
Okay, I think I've got this. I just need to apply the given variable cost percentages to each cost item and sum them up. Should be a quick calculation.
KA
Karl
1 year ago
Hmm, I'm a bit confused by the variable cost percentages. I'll need to carefully break down each cost component to figure out the right marginal cost.
MY
Myrtie
1 year ago
This looks like a straightforward cost accounting problem. I'll need to identify the variable costs and calculate the marginal cost per unit.
PA
Pamella
1 year ago
This seems tricky, with all the different cost categories. I better double-check my work to make sure I don't miss anything.
IZ
Izetta
1 year ago
Hmm, I'm not totally sure about this one. I'm debating between A and D. I'll have to think it through carefully to decide which one is correct.
AR
Arlie
2 years ago
Haha, this reminds me of the time my accountant friend tried to explain marginal cost to me. I just nodded and smiled, but secretly had no idea what he was talking about. Looks like I'm not the only one struggling with this!
XE
Xenia
2 years ago
I agree with Jody, C) $8 makes sense when you factor in all the variable costs.
GE
Geraldine
2 years ago
Hmm, this is a tricky one. I'm going to go with C) $8 just to be safe. Can't be too sure with these management accounting questions!
AR
Arletta
2 years ago
Let's see if we can figure this out together. I think it might be D) $9.
LU
Lura
2 years ago
I agree with you, I also believe it's C) $8.
BU
Buffy
2 years ago
I'm leaning towards A) $6 as the marginal cost per unit.
CA
Carey
2 years ago
I think the answer is B) $7.
JO
Jody
2 years ago
I believe it's C) $8 because we need to consider both variable and fixed costs.
JO
Jordan
2 years ago
D) $9 seems more accurate to me. The variable costs add up to a higher amount than $7.
MI
Miss
2 years ago
Yes, $9 makes sense considering the breakdown of variable costs provided.
MI
Miss
2 years ago
I think you're right, $9 does seem more accurate based on the variable costs.
IS
Isabella
2 years ago
I think the answer is B) $7. The variable costs are made up of 100% of direct material cost and 50% of direct labor cost, plus 50% of production overhead and 100% of selling and distribution overhead.
ME
Merissa
2 years ago
Yes, it's clear now how the marginal cost per unit is calculated.
BL
Blossom
2 years ago
I also believe it's B) $7, based on the information provided.
BL
Blossom
2 years ago
I think it's C) $8, because of the breakdown of variable costs.
BR
Britt
2 years ago
So, the marginal cost per unit is $7 then.
BL
Blossom
2 years ago
I agree, the answer is B) $7.
AR
Arthur
2 years ago
That makes sense, the variable costs are calculated that way.
AD
Adelle
2 years ago
I agree, the answer is B) $7.
AS
Ashton
2 years ago
I think the answer is A) $6.