A company presents the following figures in total for last year (figures in SEK thousand):
Direct material 4,200
Direct pay 1,800
Material costs 840
Manufacturing costs 2 700
Administration and sales costs?

The company manufactures and sells a total of 6000 units.
Total administration and sales costs are SEK 2,385,000.
Traditionally, material costs are calculated as an order on direct material, the production cost is calculated as an order on direct material and administration, and the selling costs are calculated as an order on the production cost. You always make an order so that the profit margin becomes 20%.
A. Calculate the cost of an order where direct material amounts to SEK 22,000 and direct salary to SEK 26,000.
B. Calculate the sales price for the order above.
C. If, instead, both material costs and manufacturing costs are based on direct pay, what will be the selling price of the order above?
D. Explain why the selling price is different in B and C.

Answer rating: 100% (QA)

A The cost of an order where direct material amounts to SEK 22000 and direct salary to SEK 26000 is ... View the full answer