A-LevelAccountingTraditional costing methods9706/12 · May/June 2022 · Q281 Mark

A business makes and sells three different product types, M, N and O. The following information is available. product M N O per unit $ $ $ selling price 240 280 250 direct material 110 120 90 direct labour 65 90 100 variable overheads 20 30 25 fixed overheads 50 30 18 profit/(loss) (5) 10 17 Each product uses the same direct material, which is in short supply. In which order of priority should the products be produced to maximise the profit?

AM→N→O

BM→O→N

CN→O→M

DO→N→M

✓ Correct answer

B: M→O→N

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Topic: Traditional costing methods, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, May/June 2022 Paper 1 Variant 2, question 28.

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