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Example 2 pg 35 of lecture notes
Relevant costingMachine overheads
Sir why we took 6000 hrs for the special order calculation as 4000 hours was already available therefore we should have taken 2000 hrs * $3 per hourHave you watched the lecture that goes with this chapter? There is no point in using the lectures notes without watching the lectures, because it is in the lectures that I explain and expand on the notes.
If you are not watching the free lectures for any reason then you need to buy a Study Text from one of the ACCA approved publishers and study from there if you want to pass the exam.There may be 4,000 hours available, but the overheads will only be incurred if the hours are actually used. Also, the extra 2,000 hours that are not available means taking hours away from existing production and therefore losing contribution – an opportunity cost.
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