- 1 Marks
Question
Calculate the most appropriate unit cost for a distribution division of a multinational company using the following information:
- Kilometres travelled: 636,500
- Tonnes carried: 2,479
- Number of drivers: 20
- Hours worked by drivers: 35,520
- Tonnes-kilometres carried: 375,200
- Cost incurred: ₦562,800
A. ₦88
B. ₦15.84
C. ₦1.50
D. ₦28,140
E. ₦227
Answer
C. ₦1.50
Explanation:
The answer is “C. ₦1.50” because the unit cost is calculated by dividing the total cost by the tonnes-kilometres carried. The total cost is ₦562,800, and the tonnes-kilometres carried is 375,200. Therefore, ₦562,800 ÷ 375,200 = ₦1.50 per tonne-kilometre.
Run-down of reasoning:
- The appropriate unit cost is determined by dividing the total cost incurred by the number of tonnes-kilometres carried. In this case, ₦562,800 ÷ 375,200 gives a unit cost of ₦1.50 per tonne-kilometre.
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- Tags: Distribution Costs, Transportation, Unit Cost
- Level: Level 1
- Topic: Costing Methods
- Series: NOV 2022
- Uploader: Theophilus