26. EOQ formula to establish its optimal reorder quantity for its single raw material. The following data relates to the stock cost:

Purchase price: $15 per item

Carriage costs: $50 per order

Ordering costs: $5 per order

Storage costs: 10% of purchase price plus $0.20 per unit per annum

Annual demand is 4000 units.

What is the EOQ to the nearest whole unit?

1. 509 units
2. 170 units
3. 485 units
4. 153 units

The following data are to be used for sub-question 31:

Budgeted labour hours 8500

Budgeted Overheads $148750

Actual Labour hours 7928

Actual overheads $146,200

31. Based on the data given above, what is the amount of overhead under-over-absorbed?

1. $2550 under-absorbed
2. $2529 over-absorbed
3. $2550 over-absorbed
4. $7460 under-absorbed

32. Alex has established the following information regarding fixed overheads for the coming month:

Budgeted information:

Fixed overheads $180,000

Labour hours 3,000

Machine hours 10,000

Units of production 5,000

Actual fixed costs for the last month were $160,000.

Alex produces many different products using highly automated manufacturing processes and absorbs overheads on the most appropriate basis.

What will be the predetermined overhead absorption rate?

1. $16
2. $18
3. $36
4. $60

33. A company has established a budgeted sales revenue for the coming period of $500,000 with an associated contribution of $275,000. Fixed production costs are $137,500 and fixed selling costs are $27,500. What is the break-even sales revenue?

1. $75,625
2. $90,750
3. $250,000
4. $300,000

35. A company has calculated its margin of safety as 20% on budgeted sales and budgeted sales are 5000unit per month. What would be the budgeted fixed costs if the budgeted contribution was $25 per unit?

1. $100,000
2. $125,000
3. $150,000
4. $160,000

36. A company wishes to make a profit of $150,000. It has fixed costs of $75,000 with a C/S ratio of 0.75 and a selling price of $10 per unit. How many units would the company need to sell in order to achieve the required level of profit

1. 10,000 units
2. 15,000 units
3. 22,500 units
4. 30,000 units