Question:-
The direct material cost is £10 000 when 2000 units are produced. What is the direct material cost for 2500 units produced?
Answer:-
£12500
Explanation:-
Given,
The direct material cost when 2000 units are produced = £10,000
Now,
The direct material cost for 1 unit = 10000/2000 = £5
Material cost when 2500 units are produced = 2500×5 = £12500
