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Why do we have to multiply by 16, they have given data for 15??
plus can u explain me why there are two variable overhead parts…
131.072 hr @ $4/hr 524
5 hr/batch at $4/hr 320—– i dont understand this partplus how do u work the components of 240?
1. They are going to make 15 batches (225/15). The have already made 1 batch and so to get the cost of the next 15 we need to get the cost for 16 and subtract the cost for the first.
2. The variable costs are based on labour hours (20 for skilled and 5 for semi skilled). It is only skilled where there will be learning (and therefore the time reduced). For semi skilled there will not be learning and so the time will not change.
3. Sorry – although the $’s are correct, the working is mistyped. It should read “16 batches x 5 hours x $4 per hour”
4. 240 is 16 batches x 15 per batch.
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