Please help me in the following qsn:
A company manufactures two products L and M in a factory divided into two cost centres, X and Y. The following
budgeted data are available:
Cost centre
X Y
Allocated and apportioned fixed
overhead costs $88,000 $96,000
Direct labour hours per unit:
Product L 3·0 1·0
Product M 2·5 2·0
Budgeted output is 8,000 units of each product. Fixed overhead costs are absorbed on a direct labour hour basis.
What is the budgeted fixed overhead cost per unit for Product M?
A $10
B $11
C $12
D $13
Also kindly advise on how i can plan myself in order to fully prepare for a CBE paper that i plan to sit by end of July. p/s I work full time and i seem to have alot of problems in this paper.
Thank you in advance
Ask the Tutor ACCA MA
Accounting for overheads
11y ago#1The number of hours to be worked in cost centre X is (8,000 x 3.0) + (8,000 x 2.5) = 44,000.
Therefore the absorption rate for cost centre X is $88,000 / 44,000 = $2 per hour.
In the same way, calculate the absorption rate for cost centre Y.
The overhead cost for Product M is then (2.5 hours x $2) + (2.0 hours x the absorption rate for cost centre M)
The only real way to prepare is to watch all the lectures in order (with the free lecture notes in front of you) and then to practice every question in your Revision Kit. (You must buy a Revision Kit from one of the ACCA approved publishers because they contain lots of exam standard questions)
Then attempt our online mock exam and get used to the time pressure in the exam.
If you have any problems when you are attempting questions then do ask in the Ask the Tutor Forum and I will try my best to help you.
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