Accounting Online Program Certification Practice Test

How much was spent on selling expenses for the items that had a cost of £2 each in Stacks plc?

1. £200

2. £250

3. £300

4. £400

The correct answer is: £200

To determine the amount spent on selling expenses for items that had a cost of £2 each in Stacks plc, it's essential to understand how selling expenses are related to the cost of goods sold. If the cost of each item is £2, we need to consider how many items were sold to calculate the total selling expenses. If 100 items were sold, for instance, the total cost would be £2 x 100 = £200. Selling expenses often include costs associated with marketing, sales force compensation, distribution, and similar expenses that are incurred to sell the products. Given that the choice provided is £200, it suggests that the calculation was based on selling 100 items at £2 each, leading to a total selling expense of £200. This aligns with common practices in accounting, where selling expenses are often calculated as a function of the volume of items sold multiplied by their cost. In this context, it is clear why £200 is the correct answer, assuming that 100 items were sold. The answer accurately reflects the straightforward computation of cost and the typical understanding of selling expenses in a business setting.