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Can You solve this question?

Forums › ACCA Forums › ACCA PM Performance Management Forums › Can You solve this question?

  • This topic has 0 replies, 1 voice, and was last updated 1 year ago by abdulrahimanes.
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  • November 18, 2023 at 9:45 am #695051
    abdulrahimanes
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    • Topics: 6
    • Replies: 8
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    Click Fit Kitchens Ltd has designed a new type of kitchen cabinet and wants to calculate the total cost to include in the production budget. in the past when new cabinets have been introduced the company has observed a learning effect of 90% which usually ceases after the first 100 batches.

    It is estimated that the first batch of cabinets will take 6 hours to produce but thereafter the learning effect will occur. Labour costs are $30 per hour and the company expects to make 250 batches of cabinets in the coming budgetary period

    Required:

    Calculate the total labour cost for making 250 batches of the new cabinets to be included in the budget for Click Fit.

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