Rainbow Ltd manufactures a product that has the following costs per unit:   Direct labour £11   Direct materials £14   Variable manufacturing overhead £19   The company has capacity to manufacture 1500 units per month, but at the moment manufactures only 1000 units per month. The fixed manufacturing overhead for manufacturing up to 1500 units per month is £18333.     A special order from Shower plc comes in for 250 units of the product.     What price must Rainbow Ltd charge Shower plc for the order if Rainbow Ltd wishes to make make an extra profit of £8294 for the coming month?   Select one:   a. £13183   b. £22961   c. £23877   d. £19294

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Rainbow Ltd manufactures a product that has the following costs per unit:

 

Direct labour £11

 

Direct materials £14

 

Variable manufacturing overhead £19

 

The company has capacity to manufacture 1500 units per month, but at the moment manufactures only 1000 units per month. The fixed manufacturing overhead for manufacturing up to 1500 units per month is £18333.  

 

A special order from Shower plc comes in for 250 units of the product.  

 

What price must Rainbow Ltd charge Shower plc for the order if Rainbow Ltd wishes to make make an extra profit of £8294 for the coming month?

 

Select one:

 

a. £13183

 

b. £22961

 

c. £23877

 

d. £19294

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