Budget

Dear Sir

Trying to answer the below question I have got stuck when came across to allowance calculation.

Question one:

Budgeted sale of X for December are 18000 units. At the end of the production process for X 10% of production units are scrapped as defective. Opening inventories of X for December are budgeted to be 15000 units and closing inventories will be 11400 units. All inventories of finished goods must have successfully passed the quality control check. What is the production budget for X for December?

Working

Budgeted sales 18000
Budgeted reduction in finished goods (3600) = 15000-11400
Budgeted production of completed units 14400
Allowance for defective units
(10%of output=1/9 of Input) 1600

Production budget 16000

Could you please explain what does the statement mean when saying 10% of output is equal to 1/9 of input?)

I have calculated the allowance as 10% of 14400 but obviously is not correct. Could you please help me to understand. I would like not to learn by heard but being able to work out the question with my understanding.

Question 2

A company manufactures a single product M. Budgeted production output of product M during August is 200 units. Each unit of product M requires 6 labor hours for completion and PR Co anticipates 20% idle time. Labor is paid $7 per hour. What is the direct labor hour cost budget per August

Working

Active hours require for production 200*6 1200
Allowance for idle time (20% of total time = 25% of active time 300
Total hours to be paid 1500

x $7 per hour

Direct labor cost budget 10500

Even in this question I have a concern how the allowance has been calculated. Myself I would have applied 20% on total time, but of course it looks like being incorrect.

Could you kindly explain why and what does the statement mean for: 20% of total time is equal to 25% of active time

Thank you very much for your help

Gabbi