top of page

Multiple Choice Questions

Manufacturing accounts

A level and AS level


A manufacturing company employs 20 workers who are paid a basic rate of $30 per hour for a 40-hour week. To meet a special order, the workers each worked 50 hours and were paid a premium of 40% over basic rate for the overtime.

What was the value of wages paid to meet the special order?

A $30 000
B $32 400
C $33 600
D $42 000

Answer: B

First 40 basic hours are to be paid as per basic rate (20 x 40 X $30) = $24,000

Overtime i.e. 10 hours are to be paid at premium rate (20 x 10 x $42) = $8,400

Total ($24,000 + $8,400) = $32,400


A manufacturing business is currently operating at full capacity. As part of an expansion programme to increase production capacity, the business intends to employ an additional factory supervisor.

How are total supervisory salaries classified?

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

Answer: C

Supervisor control certain number of employees capable of certain production level.


Which item may appear in the manufacturing account of a business?

A carriage inwards
C discounts allowed
B carriage outwards
D discounts received

Answer: A

Carriage inwards is carriage on purchased raw ~ materials added into purchases of raw materials.


A trader runs a manufacturing business.

Which department should it close?

A department 1 where contribution exceeds fixed costs
B department 2 where contribution is less than fixed costs
C department 3 where revenue exceeds marginal costs
D department 4 where revenue is less than marginal costs

Answer: D

If revenue is less than marginal costs, it means negative contribution. And in case of negative contribution business cannot even achieve break-even point.

bottom of page