Help with Q14 Osborne online test one

jane Registered Posts: 165 Dedicated contributor 🦉
Please could someone help with this

Sales - the demand is expected to average 8000 units per month, at a selling price of £12.00 per unit
Materials - the product requires 0.5 kg of material U for each unit
Labour - each unit requires 12 minutes of labour at £18 per hour.
Overheads - the product would be manufactured in a seperate facotry, with total fixed production overheads of £16000 per month
Profit - the grss margin required is at least 25%

Max prod cost per unit = £9.00
Build up of max prod cost per unit
Materials = £3.40
Labour = £3.60
Overheads = £2.00

What is the max cost per kilo for Mat U ?
I have been looking at this so long now I probably can't see the obvious!!

Appreciate anyone that could help me



  • Terdoo
    Terdoo Registered Posts: 144 Dedicated contributor 🦉
    Re: material U

    I think material U is = Material cost 3.40/0.5 = £6.80 maximum material cost
    Hope this help
  • jane
    jane Registered Posts: 165 Dedicated contributor 🦉
    haha, thanks Terdoo you are a star!!! I've been looking at this for sooooo long, why did I not see that?
    Getting very worried now as my exam is on Wednesday afternoon, and I really dont think I am ready for this one at all. I have worked so darn hard on this too.
    Thanks again :)
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