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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › budgeting
Hi,
please help me with below.
A company manufactures a single product M.
Budgeted production output is 200 units.
Each unit requires 6 hours labour work for completion and the company anticipates 20% idle time.
Labour is paid at a rate of 7$ per hour. What is the direct labour cost budget?
my calculations were
total hours 200x 6 so 1200 hours which are 80% from total hours because we do have 20% idle time so total hours are 1500.
1500×7$ 10500 total cost
in the book the answer is 8400 or maybe I am going mad. 🙁
Assuming that you have typed out the question correctly, then your answer is correct and the answer in your book is wrong.
(If it is a BPP Revision Kit question, then tell me the number of the question and I will check the wording myself 🙂 )