A drum kit manufacturer plans to make 500 drum kits this year. Estimated costs are as follows: - raw materials £40 per drum kit - rent £600 per month - heating and lighting £900 per quarter - other expenses £56,000 per annum The manufacturer's estimated total cost for the year is: A £66,840 B £77,500 C £85,900 D £86,800 Your answer _______

GCSE OCR Business Revenue, costs and profits: A drum kit manufacturer plans to

A drum kit manufacturer plans to make 500 drum kits this year - OCR - GCSE Business - Question 6 - 2022 - Paper 1

Question 6

A drum kit manufacturer plans to make 500 drum kits this year. Estimated costs are as follows: - raw materials £40 per drum kit - rent £600 per month - heating and ... show full transcript

Worked Solution & Example Answer:A drum kit manufacturer plans to make 500 drum kits this year - OCR - GCSE Business - Question 6 - 2022 - Paper 1

Step 1

Calculate the raw materials cost for 500 drum kits

96%

114 rated

Answer

The cost of raw materials can be calculated as follows:

Cost of raw materials = Number of drum kits × Cost per drum kit

Cost of raw materials = 500 × £40 = £20,000

Step 2

Calculate the total rent for the year

99%

104 rated

Answer

Rent is £600 per month. To find the yearly rent, multiply by 12:

Yearly rent = Rent per month × 12 Yearly rent = £600 × 12 = £7,200

Step 3

Calculate the total heating and lighting costs for the year

96%

101 rated

Answer

Heating and lighting costs are £900 per quarter. For the entire year, we calculate:

Yearly heating and lighting = Cost per quarter × 4 Yearly heating and lighting = £900 × 4 = £3,600

Step 4

Include the other expenses

98%

120 rated

Answer

Other expenses for the year are already given as £56,000.

Step 5

Calculate the total estimated cost for the year

97%

117 rated

Answer

Now, sum all the costs calculated:

Total estimated cost = Raw materials cost + Yearly rent + Yearly heating and lighting + Other expenses

Total estimated cost = £20,000 + £7,200 + £3,600 + £56,000 = £86,800

A drum kit manufacturer plans to make 500 drum kits this year - OCR - GCSE Business - Question 6 - 2022 - Paper 1

Worked Solution & Example Answer:A drum kit manufacturer plans to make 500 drum kits this year - OCR - GCSE Business - Question 6 - 2022 - Paper 1

Calculate the raw materials cost for 500 drum kits

Calculate the total rent for the year

Calculate the total heating and lighting costs for the year

Include the other expenses

Calculate the total estimated cost for the year

Join the GCSE students using SimpleStudy...