Practice · Syllabus A3

Cost classification

Total cost = fixed cost + variable cost per unit × units. Fixed cost per unit falls as output rises.

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Question 1 · Section A · Syllabus A32 marks

Building up a cost

Norcott Co has these costs for a job:

Cost$
Direct materials6,600
Direct labour4,800
Direct expenses7,600
Production overheads4,300
Administration overheads4,700
Selling and distribution overheads3,600

What is the prime cost of the job? (2 marks)