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Dear John,
Could you explain how to arrive at the amount of lost contribution: (80-34)/2
I understand that 34 = 10 (direct mat) + 20 (direct labor) + 4 (variable overheads) but I cannot really understand why we should divide the amount (80-34) by 2 as only 20 (direct labor) and 4 (variable overheads) are on hour basis.
Thank you very much
I am sorry, but I do not have the BPP Study Text – only the Revision Kit – and so I can’t really help without seeing the question.
Have you watched my free lectures on relevant costing? (because they might help)
If you are watching the free lectures then your time is much better spent working through questions in the Revision Kit, because they are all exam standard questions and practice on those questions is vital. The lectures are a complete free course and cover everything needed to be able to pass the exam.
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