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Budget Materials output

Forums › ACCA Forums › ACCA MA Management Accounting Forums › Budget Materials output

  • This topic has 2 replies, 2 voices, and was last updated 7 years ago by Tod.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • December 1, 2015 at 11:03 am #286692
    Tod
    Member
    • Topics: 9
    • Replies: 11
    • ☆

    output 10000 units.

    material $35.000
    labour $43.000
    overhead $50.000
    total cost $128.000.
    Material cost is variable and overhead costs are fixed up to 20.000 units. labour cost includes a supervisor’s fixed salary of $11000 and the remainder is variable.

    What is the budget total cost for an output of 15.000 units?

    $150,500
    $161,500
    $167,000
    $192,000?

    December 1, 2015 at 3:55 pm #286750
    HazE
    Participant
    • Topics: 11
    • Replies: 84
    • ☆☆

    Answer Is 161,500
    Work it one by one…
    first is material and it says its totally variable so get the cost per unit for it 35000/10000=3.5
    labour it says there is a fixed and a variable element to it..we know the fixed is 11000 and we can get variable by subtracting fixed from 43000 to get 32000 and per unit would be 32000/10000=3.2
    lastly the overheads it says are fixed totally up to 20000 units so nothing changes there
    Now we can work for the asked units which are 15000
    so material 15000*3.5=
    labour 15000*3.2 + the fixed 11000
    overheads doesnt change since they are fixed 50000
    add them up

    December 1, 2015 at 6:56 pm #286819
    Tod
    Member
    • Topics: 9
    • Replies: 11
    • ☆

    Thanks !!!

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    Posts
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