- November 17, 2022 at 2:03 am #671660Nhathuy0105Participant
- Topics: 3
- Replies: 1
The following information is available for F Co in the latest period
Original budget Flexed budget Actual results
Sales and production (units) 11,200 9,500 9,500
$’000 $’000 $’000
Which of the following statements is correct?
1. Budgeted production volumes were achieved during the period
2. Direct labour is a variable cost
3. The actual selling price per unit exceeded the standard selling price per unit
4. Direct material cost savings were achieved against the budget cost allowance
I have calculated the selling price and answer 3 is correct but why is answer 2 wrongNovember 17, 2022 at 8:36 am #671686John MoffatKeymaster
- Topics: 56
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It seems that you have not typed out the whole question because you have not given the $ amounts.
If the labour cost per unit is the same, then it is a variable cost. However if the cost per unit is not the same then it becomes a semi-variable cost (part variable and past fixed).
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