Question
22. SecuriPrint Ltd produces pre-printed cheques for customers to use in automated account payable departments. The cheques include personalized customer details. A new customer has
22. SecuriPrint Ltd produces pre-printed cheques for customers to use in automated account payable departments. The cheques include personalized customer details. A new customer has ordered a batch of 3,000 cheques. The following data illustrate SecuriPrint's cost for a typical batch of 1,000 cheques:
Variable materials 72.00 Variable wages 24.00 Machine set up (fixed per batch *) 7.20 Design and artwork (fixed per batch *) 36.00 139.20
* The design and machine setup costs are fixed per batch regardless of the batch size. SecuriPrint absorbs production overhead at a rate of 10% of variable wages cost. A further 5% is added to the total production cost of each batch to allow for selling, distribution, and administration overhead.
SecuriPrint requires a profit margin of 40% of sales value.
The selling price for a batch of 3,000 cheques should be:
A) 743.40
B) 592.20
C) 579.60
D) 497.45
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