2.4 - Overhead Charges
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Practice Questions
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What is the formula for calculating Effective Cost Price?
💡 Hint: Think about the expenses added to the original cost.
Name one example of overhead charges.
💡 Hint: Consider the costs incurred beyond the product itself.
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Interactive Quizzes
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What are overhead charges?
💡 Hint: Think about what expenses are not directly associated with making the product.
True or False: The effective cost price can be calculated by subtracting overhead charges from the cost price.
💡 Hint: Remember the formula we discussed.
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Challenge Problems
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A manufacturing unit produces gadgets with a cost price of $500. They incur $120 in overhead expenses for packaging, $80 for transport, and $100 for labor. What should be the effective cost price and how could they price their product to ensure a profit of $150?
💡 Hint: First sum up all overhead charges with the cost price, then add the desired profit.
A store has an effective cost price of $650, and the overhead charges account for $200. If they sell the item at a 30% profit margin, what will be the selling price?
💡 Hint: Calculate the profit first, then add to the effective cost price.
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