Figure 1 A company usually processes 20,000 orders at a total cost of £300,000. During the year, only 16,000 orders were processed.
Refer to Figure 1. What is the cost of unused activity?
A) £300,000
B) £240,000
C) £30
D) £60,000

Question

Quizplus · Accepted Answer

The company usually processes 20,000 orders at a total cost of £300,000, which means the cost per order is £15 (£300,000/20,000). If only 16,000 orders were processed, the cost of unused activity is the cost of the 4,000 orders that were not processed. This can be calculated by multiplying the cost per order (£15) by the number of unused orders (4,000), which gives a cost of £60,000 (Answer D).

Figure 1 a Company Usually Processes 20,000 Orders at a Total