The following cost information has been obtained from the accounts of LGC Ltd for an output level of 400,000 units: dire

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The Following Cost Information Has Been Obtained From The Accounts Of Lgc Ltd For An Output Level Of 400 000 Units Dire 1 (76.63 KiB) Viewed 62 times

The following cost information has been obtained from the accounts of LGC Ltd for an output level of 400,000 units: direct material is Ghc2,000,000; direct labour is Ghc800,000; indirect material and indirect labour amount to Ghc320,000 and Ghc160,000 respectively whiles depreciation, repairs, and subcontractors fees are Ghc400,000, Ghc160,000 and Ghc160,000 respectively. After a reveal of the past records by management, the following classifications were established: purely variables costs are direct material, direct labour and indirect material whiles indirect labour and depreciation remain unchanged irrespective of changes in output level. However, repairs and subcontractor fees are split between fixed and variable components in the ratio 3:2 and 1:3 respectively. The total fixed cost is determined to be? O A. Ghc596,000 O B. Ghc696,000 O C. Ghc796,000 O D. Ghc599,000