Question

MANAGEMENT ACCOUNTING AND DECISION MAKING 1(2019_20) Dashboard My courses Management Accounting and Decision Making 1 (2019 20) Assignments > MADM 1 Multiple Choice Test Monday 4th Nove Exmouth Ltd. owns a yacht that is in need of repair and which was purchased for £3,400. The company is working to full capacity but is considering refurbishing the yacht for resale. Workers who are paid £10 per hour will carry out the refurbishment and it is estimated that 100 hours work is required. The normal labour charge for customers is £20 per hour. The company believes that the yacht could be sold for £3,100 in its current condition. Materials costing £500 would be required to carry out the refurbishment Calculate the minimum resale price that the business would have to charge to justify the refurbishment of the yacht: QUESTIO Not yet Marked P Flag Select one: O a. £5,900 b. £5,100 C £4,600 d. £5,600 NEXT

Answer 1

Answer is given below

Minimum Resale price Answer is Option c) £4,600.00 Current Resale value £3,100.00 Additional labor cost £1,000.00 Additional Material cost £500.00 Minimum Resale price £4,600.00 Note: Only additional actual labor cost incurred is relevant for this