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  1. Avatar of m1n2b3v says

    lecturer.
    i feel sorry for you and you might send your students to TIME OUT for not remembering the term CONTRIBUTION………..even i named the term when you asked…………

  2. Avatar of nakeshia says

    I have a question.

    QT co. Manufactures a single product and an extract from their flexed budget for production costs is as follows.
    80%. 90%
    Direct material. 2400. 2700
    Labour. 2120. 2160
    Production o/h. 4060. 4080

    What would the total production cost allowance be in a budget flexed at the 83% level of activity?

    I keep on getting 7121.4 which is wrong. Any help plz???????

    • Avatar of John Moffat says

      You need to us high/low because some of the costs are variable and some of the costs are fixed.

      The total cost for 80% is 2400 + 2120 + 4060 = 8580
      The total cost for 90% is 2700 + 2160 + 4080 = 8940

      So, the variable cost for 10% is 8940 – 8580 = 360.
      So the variable cost for 3% (83% – 80%) is 3/10 x 360 = 108

      So the total cost for 83% is 8580 (the cost for 80%) + 108 (the extra variable cost for the extra 3%) = 8688.
      (there is obviously no extra fixed cost for the extra 3%)

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