June 2011 Q1 (c)

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February 12, 2021 at 9:28 am #610115
Albert
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I have a question regarding 2011 Q 1 (c)How are variable costs of $ 5346 and fixed costs of $1980 being calculated
February 13, 2021 at 8:48 am #610200
Ken Garrett
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The answer appendix shows variable costs as: 36 labour ($18 x 2 hrs) VOH $12 x 2hrs = 24 and parts 75. So Total variable = 135.

9% of units need repair so: 9% x 440,000 x 135 = 5,343,000

Fixed = $ x 2hrs x 440,000 x 9% = 1,980,000
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