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A Level Accounting (9706)•9706/12/O/N/21
Question 22 from 9706/12/O/N/21

Explanation

Ambiguous bonus calculation prevents exact total wages Steps: - Basic pay per worker: 40 hours × 70/hour=70/hour = 70/hour=2,800. - Total basic pay for 20 workers: 20 × 2,800=2,800 = 2,800=56,000. - Extra units per worker: 145 – 120 = 25. - Bonus rate: 20% × 70=70 = 70=14 per extra unit (assuming per-unit payment), bonus per worker: 25 × 14=14 = 14=350, total bonus: 20 × 350=350 = 350=7,000. - Total wages: 56,000+56,000 + 56,000+7,000 = 63,000(doesnotmatchchoices).Notenoughinformation:Bonusphrasing("2063,000 (does not match choices). Not enough information: Bonus phrasing ("20% basic rate per hour for each product") is ambiguous—lacks clarity on whether it's per unit, equivalent hours, or proportional to time/production. Why A is correct: - Likely intended answer per source, but calculation yields 63,000(doesnotmatchchoices).Notenoughinformation:Bonusphrasing("2063,000; choices suggest possible error in problem numbers (e.g., rate as 7/houryields 7/hour yields ~7/houryields 6,300–7,020rangewithvariations).Whytheothersarewrong:−B:Possiblemiscalculationofbasicatlowerrate(e.g.,7,020 range with variations). Why the others are wrong: - B: Possible miscalculation of basic at lower rate (e.g., 7,020rangewithvariations).Whytheothersarewrong:−B:Possiblemiscalculationofbasicatlowerrate(e.g.,7/hour without full bonus). - C: May assume higher rate or include unrelated costs (e.g., $70/hour for fewer workers plus overtime). - D: Likely overestimates bonus …

Topic: Standard costing

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