BPP 2019/2020 Mixed Bank 1 18.11

I only have the current edition of the Revision Kit and so I am not sure which questions they will be because the questions change.

18.11 CA Co manufactures a single product and has drawn up the following flexed budget for the year. 60% 70% 80% $ $ $ Direct materials 120,000 140,000 160,000 Direct labour 90,000 105,000 120,000 Production overhead 54,000 58,000 62,000 Other overhead 40,000 40,000 40,000 Total cost 304,000 343,000 382,000 What would be the total cost in a budget that is flexed at the 77% level of activity? ? $330,300 ? $370,300 ? $373,300 ? $377,300

The question wants you to calculate the total cost at the 77% activity level. Materials are obviously a variable cost and are $2,000 for 1% Labour is obviously a variable cost also and is $1,500 for 1% Production overheads are semi-variable and so you need to use the high-low method. Other overheads are obviously a fixed cost and so are $40,000 at all levels.