# data[].attributes.body
b. Accepted

# data[].attributes.body
The marginal cost of producing each can is 14p (direct materials 5p + direct labour 5p +
variable overheads 4p), the offer prices is 18p/can, which is above marginal cost, and gives a
contribution of 4p.
The profits increase by the amount of the extra contribution,
increased by ￡2,000 (￡9,500 – ￡7,500)
The full production capacity has been used without extra fixed costs

# data[].attributes.body
Question 2
a)total cost=(20+18)x12,500+200,000=675,000
total cost per mat=675000/12500=54
b) marginal cost per mat = 20+18=38
c) profit=(60-54)x12500=75,000