MANAGEMENT

ACCOUNTING

ASSIGNMENT #1
1. Management Information

2. Business Organization & Accounting

3. Cost Classification

4. Cost Behaviour

NAME:
…………………………
……......
1 Which TWO of the following are secondary external sources of data?

Economic trends published by the Office for National Statistics in the UK

The Singapore Business Times
Data collected for a survey
Historical records of expenditure on canteen costs

2 The cost accountant has provided information about the actual and budgeted costs of the materials used
in production in the last month.

This information will primarily aid management in which of the following areas?

A Planning
B Implementing
C Control
D Decision making

3 Which of the following is NOT true in relation to e-mail?

A Information can be sent to multiple users on one message

B almost instantaneously delivery to recipient
C Messages are stored after they are received
D E-mail is always informal and ‘off-the-record’

4 The management accountant compares the profitability of two products, P and Q, and concludes that P is
the best product to make. He writes a report of his findings for the board of directors.

What will this report aid management in?

A Decision making
B Planning
C Controlling
D Implementing

5 Which of the following only contains essential features of useful management information?

A Accurate, clear, presented in report format

B Timely, reliable, supported by calculations
C Regular, complete, communicated in writing
D Clear, accurate, relevant for its purpose

6 Which TWO of the following are necessary features of useful management information?

It is clear to the user

It is detailed and completely accurate
It is provided whatever the cost
 It is relevant for its purpose

7 Information about the trend in monthly sales and profit for a product for the last two years is to be
presented visually.

Which would be the most appropriate method of presentation?

A Pie chart
B Bar chart
C Table
D Line graph
8 Which of the following statements is UNTRUE?

A Management accounts detail the performance of an organization over a defined time period and
the state of affairs at the end of that period
B There is no legal requirements to prepare management accounts
C The format of management accounts is entirely at management discretion
D Management accounts are both a historical record and a future planning tool

9 Which of the following is an external source of information?

A Value of sales, analysed for each customer

B Value of purchases, analysed for each supplier
C Prices of similar products, analysed for each competitor company
D Hours worked, analysed for each employee

10 Which of the following statements is CORRECT?

A Cost accounting is only relevant to manufacturing organizations

B Management accounts must be presented in a regulated format
C Financial and management accounts are prepared from completely separate sets of data
D Management accounts are normally prepared for internal use

11 Which of the following statements is TRUE about management accounts?

A They must be stated in purely monetary terms

B Limited companies must, by law, prepare management accounts
C They serve as a future planning tool and are not used as an historical record
D They include financial and non-financial information

12 Which TWO of the following are primary sources of data?

Historical records of transport costs to be used to prepare forecasts for budgetary planning
The Annual Abstract of Statistics, published by the Office for National Statistics in the UK
Data collected by a telephone survey to monitor the effectiveness of a bank’s customer services
Data collected from an interview with employees regarding improvement in workplace facilities

13 Which of the following statements is TRUE of a memorandum?

A It is signed by the person sending it

B It is generally used for the communication of short messages between different organizations
C It is not used if important information is to be communicated
D It is used for any written communication within a company

14 Which TWO of the following statements about cost and management accounting are TRUE?

Cost accounting cannot be used to provide inventory valuations for external financial reporting
 There is a legal requirement to prepare management accounts
The format of management accounts may vary from one business to another
Management accounting provides information to help management make business decisions

15 What is the complimentary close based on the following salutations?

Dear sir/madam Dear Mr. Smith

A Yours truly Yours sincerely
B Yours sincerely Yours faithfully
C Yours faithfully Yours sincerely
D Yours gratefully Yours truly
16 A company wants to visually present its total sales for the last year made by each its ten divisions.

Which of the following would be the most appropriate method?

A Pie chart
B Bar chart
C Line graph
D Spreadsheet

17 Which of the following statements is TRUE?

A Strategic planning is carried out by front-line managers

B Non-financial information is relevant to management accounting
C A management information report must be relevant for a variety of purposes
D Management information should be detailed and accurate as possible

18 Which one of the following statement is concerning the difference between management accounts and
financial accounts is INCORRECT?

A Financial accounts are governed by strict accounting rules and regulations, management
accounts are not
B There is a legal requirement for management accounts
C Management accounts are often required for individual divisions and/or products whereas
financial accounts usually cover the whole company
D Management accounts are mainly for internal purposes whereas financial accounts are mainly
for external purposes

19 The management accountant of X Ltd has written a report assessing the cost savings that could be made if
the company was to invest in new technology.

In which area will the report primarily aid the management of X Ltd?

A Budgeting
B Control
C Decision-making
D Monitoring

20 Which of the following statements concerning management information is/are correct?

(1) A management information user should have all the information he/she needs to do his/her job
properly
(2) A management information report must be relevant for a variety of purposes
(3) A management information report should contain a lot of detail to ensure complete accuracy

A 1 only
B 1 and 2 only
 C 2 and 3 only
D 3 only

21 An estimate has been made of the effect a change in selling price would have on the profit of a product.

In which area will this information be especially useful?

A Cost reduction
B Decision-making
C Feedback control
D Responsibility accounting
22 Which of the following is an example of internal information for the wages department of a large
company?

A A code of practice issued by the institute of directors

B A national minimum wage
C Changes to tax arrangements issued by the tax authorities
D The company’s employees’ schedule of hours worked

23 A company’s sales in the last year in its three different markets were as follows

Market 1 $100,000
Market 2 $150,000
Market 3 $50,000

What angle in a pie chart will represent market 3 sales?

A 17 degrees
B 50 degrees
C 60 degrees
D 120 degrees

24 Are the following statements TRUE or FALSE?

True False
(1) Completed questionnaires, as part of a market research survey, are examples of data
(2) Monthly management accounting reports, resulting from the processing of financial transactions,
are examples of information

25 The following table shows the salary of part qualified management accountants in four different regions:

South-East $21,500
North-East $18,200
North-West $17,500
South-West $16,700

Which of the following will best highlight the difference between the salaries of the various regions?

A A multiple bar chart

B A component bar chart
C A simple bar chart
D A pie chart
1 Which of the following staff would least involved in the purchase of inventory on credit?

A Purchasing manager
B Receivables controller
C Stores manager
D Accounts payable clerk

2 Which of the following is a disadvantage of batch processing?

A Information will not always be up to date

B It is not suitable for internal regular task
C A ‘missing’ record cannot be located
D Batches sent off for processing cannot be tracked

3 Which one of the following does NOT apply to real time systems?

A Output can be simultaneous with input

B Updates are done at predetermined times
C On-line input, queries and processing are possible
D Continually changing data is received

4 Which of the following is NOT an example of internal communication for the accounts department?

A Goods received note

B Time sheets for employees
C Purchase orders
D Purchase invoices

5 Which TWO of the following are features of good systems for coding data within a business?

Management authorization is required before any new codes can be created

Different items within the system can have the same code
Information for management analysis can be extracted easily
Codes need not be uniform in format

6 Which of the following is NOT normally a function of the purchasing department?

A Negotiating prices with suppliers

B Raising purchase orders
C Recording goods received into inventory
D Ensuring only authorized purchases are made

7 Who will provide information on standard rates of pay?

A Finance manager
 B Union president
C Production manager
D Human Resource manager

8 Which of the following activities may be the responsibility of an accounting technician?

A Calculating cost variances

B Making capital investment decisions
C Approving budgets
D Allocating warehouse space

9 Which TWO of the following activities are likely to be the responsibility of an accounting technician?

Negotiating prices with suppliers

Producing product profit statements
Setting rates of pay
Valuing inventory

10 What is the most appropriate definition of an office?

A A centre for exchanging information between businesses

B A centre for information and administration
C A place where information is stored
D A room where many people using IT work

11 Which TWO of the following are advantages of real-time processing?

Audit trails are easily made since the processing of data occurs at pre-determined times
Customer queries can be responded to immediately
Processing can be performed during the evening when the computer is not being used
The data is always up-to-date

12 Which TWO of the following statements are TRUE?

Policies should be in place to deal with the authorization of the purchase of non-current assets
Employees need to know where to find the policy manual to refer to but need not have read it
Strict adherence to the manual can lead to inflexibility
Internal policies always override legislations

13 Which of the following tasks would be most appropriate for an accounting technician?

A Use a spreadsheet to compare the effects on labour costs of different productivity schemes
B Reprogram an off-the-shelf accounting package to meet the specific needs of an organization
C Authorize a contract for the implementation of an integrated computerized accounting system
D Maintain a register of passwords issued to users of financial software package

14 Which function is least likely to be carried out by an accounts department?

A Arrangement of payment of accounts payable

B Calculation of wages and salaries to be paid
C Despatch of customer order
D Preparation of company financial records

15 Which of the following costs would NOT be the concern of the supervisor of a production department?

A Labour costs
 B Material costs
C Maintenance costs
D Finance lease payments

16 Which of the following activities is most likely to be the responsibility of an accounting technician?

A Coding invoices
B Determining selling price strategy
C Interpreting cost variances
D Making capital investment decisions

17 Which of the following is a feature of a centralised organisation?

A The authority to take decisions is passed down to units

B It offers more participation in decision-making at lower levels
C Decisions can be taken more quickly and responsively
D Upper levels in the hierarchy retain the authority to take decisions

18 Which of the following is a benefit of decentralization?

A Decisions are made at one place in the organization

B Reductions in bureaucracy
C Better crisis management
D Improves the motivation of junior managers

19 Which of the following is a potential advantage of decentralization?

A Greater control by senior management

B Risk reduction in relation to operational decision making
C More accountability at lower levels
D Consistency of decision making across the organization

20 Which of the following statements about an organization chart is NOT true?

A It provides a summary of the structure of a business

B It can improve internal communications within a business
C It can improve employees’ understanding of their role in a business
D It can indicate functional authority but not line authority within a business

21 Which one of the following is an advantage of centralization?

A It helps to develop the skills of junior managers

B It avoids overburdening top managers in terms of workload and stress
C Senior managers can take a wider view of problems and consequences
D Controls and accountability are better

22 Decentralization is usually desirable when which of the following conditions are met?

A The organization is very small

B The firm is rather static, i.e. decision making can move relatively slowly
C Managers are not willing to share power with subordinates
D The company is spread out geographically

23 An organisation chart is a way of showing which of the following?

A The stakeholders who have an interest in the company

 B The physical layout of the buildings on a site
C The informal patterns of communication
D How the tasks of an organisation are divided and co-ordinated

24 Which one of the following is NOT an advantage of centralization?

A There is less risk of local managers breaching safety regulations

B Concentrated expertise allows staff to keep up with modern developments
C Staff can respond quickly to local business changes
D Economies of scale in purchasing supplies

25 Y plc. is a growing organization which has recently diversified into a number of significant new product
markets. It has also recently acquired another company in one of its overseas market.

What would be the most appropriate form of organization for Y plc.?

A Geographical Departmentation
B Divisionalisation
C Functional Departmentation
D Product Departmentation
1 How is the annual salary of the financial accountant classified?

A A fixed production cost

B A fixed administration cost
C A variable administrative cost
D Part of prime cost

2 Which TWO of the following classifications could be applied to the cost of raw materials?

Direct
Fixed
Period
Production

3 For the past 8 months, Jinan Corporation has experienced a steady increase in its cost per unit even
though total costs have remained stable This cost per unit increase may be due to _____________ costs
because the level of activity at Jinan is _______________.

Which two of the following words completes the statement?

A Fixed, decreasing
B Fixed, increasing
C Variable, decreasing
D Variable, increasing

4 Which of the following is most likely to be treated as an indirect cost by a computer manufacturer?

A Production line worker wages

B Microchips
C Plastic housing for computer bodies
D Factory supervisor’s wages

5 Which TWO of the following is part of the prime cost for a manufacturing company?

Cost of transporting raw materials from supplier’s premises

Wages of factory workers engaged in machine maintenance
Depreciation of lorries used for deliveries to customers
Hire of machinery for a particular production job

6 A production worker is paid a salary of $650 per month, plus an extra 5 cents for each unit produced
during the month.

The labour cost is best described as which of the following?

A A variable cost
 B A fixed cost
C A step cost
D A semi-variable cost

7 Which of the following is TRUE of a semi variable cost?

A It would be zero when output is zero and would increase in direct proportion to output
B It would be more than zero if no products were made and would then increase in direct
proportion to output
C It would be a fixed amount when output was zero and would not increase in direct proportion to
output
D It would be zero if output were zero and would change erratically as output increased
8 Which of the following will be classified as an overhead?

A Wood used in the manufacture of bookcases

B Glue used in the manufacture of furniture
C Fabric used to cover the seats of chairs
D Direct wages of production staff incurred in the production of tables

9 A product that a company manufactures requires 3 kg of material A costing $6.20 per kg and 4 kg of
material B costing $5.60 per kg. The product requires 2 hours of labour at a cost of $7.40 per hour. The
product is sold in packs of 10 and the packaging for 10 units costs $22. Fixed production costs are
$60,000 per annum and selling, distribution and administration costs are $24,000 per annum. The
company makes 15,000 units of the product each year.

What is a total cost per unit of the product?

A $58.00
B $62.00
C $24.80
D $63.60

10 Which TWO of the following would be classified as direct costs for a company producing tables and
chairs?

The depreciation of a machine on an assembly line

The hire costs of maintenance tools and equipment
The wood used in making the tables and chairs
The carpenter’s wages

11 The cost per unit of an expense item at different levels of activity is shown below:

Activity (units) Cost per unit ($)

200 12·00
300 8·00
400 7·00
500 5·60

What is the behavioural classification of the expense item?

A Fixed cost
B Semi-variable cost
C Stepped-fixed cost
D Variable cost

12 The table shows the total of Cost Y at different production levels of Product X:
 Units of Product X Total Cost Y ($000)
100 60
150 60
200 90
250 90

What could have been the cause of the increase in cost?

A Increased fuel and maintenance costs for delivery vehicles

B Increased storage requirements
C Loss of discounts on raw materials
D Pay increase for direct labour
13 A company currently produces 6,000 units of its single product each period, incurring total variable costs
of $60,000 and fixed costs of $42,000. Production will increase to 8,000 units per period if the company
expands capacity resulting in changes both to the variable costs per unit and to the total fixed costs. For
production of 8,000 units per period total variable costs would be $76,000 and fixed costs $50,000.

What is the reduction in total cost per unit comparing the costs for 8,000 units per period with the unit
costs currently being incurred?

A $0·50
B $0·75
C $1·25
D $2·08

14 Which of the following would be classed as indirect labour?

A Machine operators in a company manufacturing washing machines

B A stores assistant in a factory store
C Plumbers in a construction company
D A team of inspectors ensuring that products meet quality standards

15 Which of the following costs is part of the prime cost for a manufacturing company?

A Delivery cost incurred in transporting raw materials from the supplier’s premises
B Wages of factory workers engaged in machine maintenance
C Depreciation of lorries used for deliveries to customers
D Cost of indirect production materials

16 Which of the following costs would be a product cost?

A Rental costs on cars used by sales executives

B Chief executive’s salary
C Business rate charge on factory building
D Depreciation on office equipment

17 Which one of the following would be classified as indirect labour?

A Assembly workers on a car production line

B Bricklayers in a house building company
C Machinists in a factory producing clothes
D Forklift truck drivers in the stores of an engineering company

18 Production costs of product X have been classified in various ways:

Prime costs $50.80 per unit

Variable costs $54.44 per unit
 Fixed overheads $15.20 per direct labour hour
Direct labour 2.6 hours per unit at $12.00 per hour
Variable overheads $1.40 per direct labour hour
Direct materials $19.60 per unit

What is the total production cost per unit of product X?

A $105.24
B $144.76
C $93.96
D $125.16

19 Which of the following would be regarded as a stepped-fixed cost in the operation of a motor vehicle?

A Hire purchase payments

B Insurance
C Petrol
D Tyre replacement

20 Which of the following should be classified as indirect labour?

A Machine operators in a factory producing furniture

B Lawyers in a legal firm
C Maintenance workers in a power generation organisation
D Lorry drivers in a road haulage company

21 Which TWO of the following are likely to be fixed costs?

Rental cost of warehouse used to store goods prior to sale

Senior purchasing manager’s annual salary
Material costs of wood used to construct tables for sale
Costs of paper used to print books

22 Production costs incurred in the manufacture of 2,400 units of a product in a period are:
$
Direct costs 19,680
Variable overheads 3,120
Fixed overheads 14,640

What would be the expected total cost of manufacturing 2,300 units of the product in a period?

A $35,880
B $36,490
C $36,620
D $37,310

23 Which of the following statement is TRUE?

A Production costs are period costs

B Selling costs will be charged as a period cost
C Finance costs will be charged as a product cost
D Administration costs are charged fully to products manufactured

24 15,000 units of a product are currently manufactured in a factory per period. Variable costs are $4·50 per
unit and fixed costs are $63,000 per period. If the capacity of the factory is increased to enable the
manufacture of 20,000 units of product per period total costs would be:
 Variable $88,000
Fixed $68,000

What would be the reduction in the total cost per unit?

A $0·80
B $0·90
C $1·05
D $1·15

25 Which TWO of the following cost classifications can be applied to a percentage commission paid to
salespersons on the basis of total sales values?

Indirect
Prime
Variable
Production
1 Business X hires a machine which is used in the final packaging process in its warehouse. A basic fixed
monthly amount is paid for the machine with an additional charge for each unit packaged. The number of
units packaged varies from period to period.

Which of the following is/are true about the cost of the machine hire to Business X?

(1) The total cost per unit packaged will vary from period to period
(2) The total cost per unit packaged will increase as packaging activity rises
(3) The total cost per unit packaged will decrease as packaging activity rises

A 2 only
B 3 only
C 1 and 2
D 1 and 3

2 Which chart shows the unit cost behaviour of straight-line depreciation costs?

3 Wright Company has observed that at an activity level of 5,000 units the cost for maintenance is $6,500,
and at 10,000 units the cost for maintenance is $9,000.

Using the high-low method, what is the cost formula for maintenance?

A $4,000 plus $.50 per unit

B $3,000 plus $.60 per unit
C $.90 per unit
D $1.30 per unit

4 A firm has the capacity to produce 3,100 units per week. At 80% capacity, the total cost per unit is $12.50
and the variable cost per unit is $7.50.

What is the total fixed cost per week?

A $49,600
B $18,600
C $12,400
 D $31,000

Production costs have been estimated at two levels of output:

50,000 units 55,000 units

Prime costs $430,000 $473,000
Overheads $330,000 $339,000

What are the estimated production costs per unit at an output level of 54,000 units?

A $14·76
B $14·84
C $15·20
D $17·00
6- The chart below shows the behaviour of a total cost as the volume of output changes:

What sort of cost is being illustrated?

A Sales persons’ salaries

B Direct factory labour cost
C Total variable production cost
D Managing director’s salary

7 A factory making soft toys uses a particular machine on each production line and each machine costs
$1,000 a month to hire. Each production line can make up to 100 toys per month.

Which of the following best describes the cost of hiring the machines?

A A fixed cost
B A variable cost
C A mixed cost
D A step cost

8 A particular cost is fixed in total for a period.

What is the effect on the cost per unit of a reduction in activity of 50%?

A Cost per unit increases by 50%

B Cost per unit reduces by 50%
C Cost per unit increases by 100%
D Cost per unit is unchanged

9 ABC Co has a manufacturing capacity of 10,000 units. The flexed production cost budget of the company is
as follows:

Capacity 60% 100%

Total production costs $11,280 $15,120

What is the budgeted total production cost if it operates at 85% capacity?

 A $13,680
B $12,852
C $14,025
D $12,340

10 A company has variable costs of $12·20 per unit and total costs, for output of 7,400 units in a period, of
$156,980.

What are the total fixed costs in the period?

A $42,540
B $66,700
C $90,280
D $247,260
11 A supplier of telephone services charges a fixed line rental per period. The first 10 hours of telephone calls
by the customer are free, after that all calls are charged at a constant rate per minute up to a maximum,
thereafter all calls in the period are again free.

Which of the following graphs depicts the total cost to the customer of the telephone services?

12 A salesperson salary is made up of a fixed basic salary plus variable commission payment for sales made.
If the sales person makes 90 sales in a year, their total salary will be $28,750. If sales are 150 per year,
their income will be $37,450.

What is the salesperson basic salary?

A $15,700
B $66,200
C $13,050
D $21,750

13 The following diagram represents the behaviour of one element of cost:

To which one of the following costs does the graph correspond?

A Telephone or electricity bills made up of a standing charge and a variable charge

B Bonus payment to employees when production reaches a certain level
C Salesman’s commission payable per unit up to a maximum amount of commission
D Bulk discounts on purchases, the discount being given on all units purchased
14 An organisation has the following total costs at two activity levels:

Activity level (units) 15,000 24,000

Total costs $380,000 $470,000

Variable cost per unit is constant in this activity range but there is a step up of $18,000 in the total fixed
costs when the activity exceeds 20,000 units.

What are the total costs at an activity level of 18,000 units?

A $404,000
B $410,000
C $422,000
D $428,000
15 A company has prepared flexed budgets at two activity levels. The cost per unit of three costs is given
below. All three costs behave in a linear manner with respect to activity.

Activity level (units) 10,000 15,000

Cost: X $3·0 per unit $2·0 per unit
Y $1·0 per unit $1·0 per unit
Z $3·5 per unit $3·0 per unit

Is each of the costs variable, semi-variable or fixed?

X Y Z
A Variable Fixed Semi-variable
B Variable Fixed Variable
C Fixed Variable Semi-variable
D Fixed Variable Fixed

16 Clerical costs in the billing department of Craig Company are a mixture of variable and fixed components.
Records indicate that average unit processing costs are $0.50 per account processed at an activity level of
32,000 accounts. When only 22,000 accounts are processed, the total cost of processing is $12,500.

Which of the following is TRUE at a budgeted level of 25,000 accounts?

A Processing costs are expected to total $8,750

B Fixed processing costs are expected to be $10,400
C The variable processing costs are expected to be $0.35 per account processed
D Processing costs are expected to total $14,975

17 A manufacturing company has four types of cost (identified as T1, T2, T3 and T4). The total cost for each
type at two different production levels is:

Cost type Total cost for 125 units ($) Total cost for180 units ($)
T1 1,000 1,260
T2 1,750 2,520
T3 2,475 2,826
T4 3,225 4,644

Which two cost types would be classified as being semi-variable?

A T1 and T3
B T1 and T4
C T2 and T3
D T2 and T4

18 Cost estimates at two levels of output show:

 Output (units) 100,000 150,000
$ $
Direct materials 50,000 75,000
Direct labour 40,000 60,000
Production overhead 35,000 45,000
Non-production overhead 12,000 12,000

Using the high-low method, what is the estimated cost for an output of 120,000 units?

A $153,600
B $155,182
C $159,000
D $164,400
19 The following is an extract from a list of data concerning production overheads in a factory:

Output (units) 35000 40000 45000 50000

Management cost ($) 75000 80000 80000 85000
Utilities cost ($) 31000 34000 37000 40000

What cost behavioural types are indicated by the above data?

Management Utilities
A Fixed Semi-variable
B Fixed Variable
C Stepped-fixed Semi-variable
D Stepped-fixed Variable

20 The following data have been collected for four cost types; W, X, Y, and Z at two activity levels.

Cost type Cost @ 100 units Cost @ 140 units

X 8,000 10,560
Y 6,500 9,100
Z 6,700 8,580

What are the behaviours of the four cost type?

X Y Z
A Variable Semi-variable Variable
B Semi-variable Variable Semi-Variable
C Variable Variable Variable
D Semi-variable Semi-variable Semi-Variable

21 The following table contains the production level and its associated costs:

Month Costs $ Production units

July 22,000 1,050
August 13,270 1,090
September 19,000 750
October 21,000 920
November 12,100 700

What is the expected cost of production 9,500 units?

A $10,000
B $38,500
C $29,700
D $28,500
22 The Valuation Department of a large firm of surveyors wishes to develop a method of predicting its total
costs in a period. The following past costs have been recorded at two activity levels.

No. of valuations (V) Total cost (TC)

Period 1 420 $82,200
Period 2 515 $90,275

The total cost model for a period could be represented by which of the following?

A TC = $46,500 + 85V
B TC = $42,000 + 95V
C TC = $46,500 - 85V
D TC = $51,500 - 95V
23 It has been found that there is a linear relationship between costs and output in 2004 with the following
equation: Y = $10,000 + 5X

If total cost in 2004 was $120,000, what was the output for that year?

A 22,000 units
B 110,000 units
C 130,000 units
D 26,000 units

24 Larson Brothers, Inc., used the high-low method to derive its cost formula for electrical power cost.
According to the cost formula, the variable cost per unit of activity is $3 per machine-hour. Total electrical
power cost at the high level of activity was $7,600 and at the low level of activity was $7,300.

If the high level of activity was 1,200 machine hours, what is the low level of activity?

A 3,300 hours
B 4,000 hours
C 3,600 hours
D 1,100 hours

25 An organization has found that there is a linear relationship between sales volume and delivery costs.
It has found that a sales volume of 400 units corresponds to delivery costs of $10,000 and that a sales
volume of 800 units corresponds to delivery costs of $12,000.

What are the delivery costs for a sales volume of 700 units?

A $17,500
B $8,000
C $10,500
D $11,500

END OF QUESTION PAPER