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Again question taken from Acca online test:
21.A spreadsheet icludes the following pie chart to analyse a company’s total manufacturing cost fora period. The company’s production overhead in the period was $ 124,700.
Direct material 23% Direct labour 12% Direct expense 7% & Production overhead 58%What was the total direct costs of the company?
A.$53,750 B.$90,300 C.$52,374 D.$43,645Ans: B(unable get the answer)
Have you watched all of our free lectures for Paper F2? (if not, then why not? 🙂 )
If you have, then you will know that direct costs here are materials, labour and expenses, which total 42%.
Since the production overheads are 58% and are 124,700, then the direct costs must be 42/58 x 124,700 = 90,300
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