A-LevelAccountingTraditional costing methods9706/12 · Oct/Nov 2021 · Q291 Mark

A manufacturer has a target profit of $80000 per annum. Last year the business made a profit of $60000 when 10000 units were produced and sold. Contribution was $10 per unit. In order to achieve the target profit the plan is to increase advertising by $10000 per annum. Variable cost per unit and selling price per unit will remain unchanged. What will be the total fixed cost if this plan is carried out?

A$20000

B$30.000

C$40000

D$50000

✓ Correct answer

D: $50000

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Topic: Traditional costing methods, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Oct/Nov 2021 Paper 1 Variant 2, question 29.

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