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# Gross Profit/total cost/labor cost

1) A business has trade payables (creditors) of \$8000 and a bank over draft of \$2000.its current ratio is 2:1 and its quick (acid test) ratio is 1.5:1. What is the value of its inventory (stock)?
A \$4000, b \$5000, c \$ 28 000, d \$ 35 000
2) The following information is given about four products. Which product makes the most gross profit?
Inventory (stock)
Turnover (per annum) Average inventory
(stock) in units Mark up on cost
%
A
B
C
d 8 times
6 times
7 times
10 times 1000
1000
1000
1000 15
30
25
20

3) A soup manufacturer uses batch costing. It produces a batch of 10 000 tins of soup with a direct materials cost of \$2500.
Direct labour involved 200 hours at a cost of \$2000, and overheads are absorbed at the rate of \$15 per direct labour hour.
What is the cost of a tin of soup?
A \$0.25, b \$0.45, c \$0.55, d \$0.75
4) A company has total production costs of \$6000 to make 10 000 units, and \$13000 to make 24000 units.
What is the total cost to make 20 000 units?
A \$ 1000, b \$ 10000, c \$11000, d \$12000
5) A business makes wedding dresses. Each machinist is paid \$30 a day and each supervisor \$ 40 a day. Each supervisor can work with up to 10 machinists and each machinist can produce one wedding dress a day.
If 95 wedding dresses a day are produced, what is the daily labour cost?
A \$2850, b \$ 3120, c \$3230, d \$3250

#### Solution Summary

The solution explains some questions relating to gross profit, total cost and labor cost.

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