ACCA PM · Chapter 2 · Question 8 of 9
Quality inspection costs are budgeted at $90,000 for the year, with 600 inspections expected. Product Z will be produced in a run of 2,500 units requiring 45 inspections. What is the inspection cost per unit of Z under ABC?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) $2.70
Explanation
Cost per inspection = $90,000 / 600 = $150.00. Cost charged to Z = 45 x $150.00 = $6,750. Per unit = $6,750 / 2,500 = $2.70.
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