Cost of Production Budgets - PCG

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi

Hope someone can help. I have just started the practice paper for December 2003. Task 1.1 (f) asks for the cost of production budget for exe and wye.

It is calculated using total labour hours (1617 & 1624) for both Labour Cost and Production Overhead cost.

Maybe, being stupid but not understanding it??

Could someone explain?? :roll:

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cost of Production Budgets - PCG

    Total cost of production would be
    Direct Labour
    Direct Materials
    Plus fixed overheads (overhead are absorbed at £12 per labour hour, so if your labour = 1,617 hour x£12)

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cost of Production Budgets - PCG

    Laura,

    If you look at the thread titled 'PCR Question' it shows the workings for task 1.1, although ignore the calculations for wastage as they are not needed for this particular question.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cost of Production Budgets - PCG

    Many thanks. I was just confusing things i think. It makes sense now.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cost of Production Budgets - PCG

    As its question (f) I think you should be looking at petrolmonkey reply. I haven't looked at the question but what Laura is refering to would relate to question (b) normally.

    Does the question as for the TOTAL cost of production?

    If it does then you need to include:-

    Direct Materials
    Direct Labour
    Fixed Overheads

    Regards

    Dean

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