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cost classification

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › cost classification

  • This topic has 1 reply, 2 voices, and was last updated 6 years ago by John Moffat.
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  • Author
    Posts
  • January 28, 2019 at 1:43 pm #503487
    uzaii
    Member
    • Topics: 9
    • Replies: 4
    • ☆

    my question is that if there is direct material of 23% , direct labor of 12% , direct expense of 7% , and production over head of 58% .

    what will be the total direct cost if production overhead of the company is $124,700.

    January 28, 2019 at 3:48 pm #503502
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54716
    • ☆☆☆☆☆

    Please don’t simply set me a test question and expect me to provide an answer.
    You must have an answer in the same book in which you found the question and so in future you must ask about whatever it is in the answer that you are not clear about. Then I will explain.

    If the production overheads are $124,700, then the total costs must be 124,700/58% = $215,000.
    Therefore the total direct cost will be 42% x $215,000.

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