- This topic has 3 replies, 2 voices, and was last updated 8 years ago by .
Viewing 4 posts - 1 through 4 (of 4 total)
Viewing 4 posts - 1 through 4 (of 4 total)
- You must be logged in to reply to this topic.
OpenTuition recommends the new interactive BPP books for June 2024 exams, Get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Edward: Practice questions OT
Hi John
Could you kindly help me to understand how Monthly fixed production overhead has been calculated?
The answer provided shown:
Monthly fixed production overhead $700,000 – (23,000x $20hr) $240,000 but I cannot see the logic.
Thanks and Regards
Gabbi
It is the high low method.
The total overhead is 700,000. The variable overhead is $20 per hour and so the total variable overhead is 23,000 x $20. The rest of the overheads must be the fixed overhead per month.
The free lecture on the high-low method will help you.
Dear John
Now it is clear, fully understood.
Thank you very much for your help
Best Regards
Gabbi
You are welcome 🙂