A Level Accounting (9706)•9706/11/M/J/24
Explanation
Incremental cost of the batch Steps:
- Identify additional materials cost: $6000.
- Calculate extra labor cost: 500 hours × 7500.
- Include the $2000 increase as additional overhead.
- Sum the costs: 7500 + 15500 (matches $15000 option).
Why B is correct:
- Relevant costing principle: batch cost equals all incremental (avoidable) costs directly tied to production.
Why the others are wrong:
- A: Excludes the $2000 overhead increase.
- C: Ignores most labor and materials, understating total.
- D: Unrelated to any calculated component.
Final answer: B
Topic: Traditional costing methods
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