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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › IAS 2
Dear Tutor,
Hope you are fine and thank you for your lectures.
Regarding IAS 2, in example 2 of chapter 10, in order to calculate the overhead we used :
Actual overhead/budgeted unit. (please correct me if I am wrong!)
Now my question is that in your question both actual and budgeted overhead were the same. what will be the answer if the actual and budgeted unit were the same, but actual and budgeted overhead were not the same. I mean for example suppose we have:
Budgeted unit : 1000
Budgeted Overhead : 1000
Actual unit : 1000
Actual overhead: 1200
In this example the overhead would be:
1200/1000 = 1.2 per unit
Or
1000/1000 = 1 per unit
?
Thank you very much
Hi,
We always use the budgeted figure to calculate the cost per unit for the fixed overheads.
Glad you’ve been enjoying the lectures.
Thanks