June 2004 question 1.6 Help!

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:31AM in AAT student discussion
Hi, how do they get the figure for Direct Labour and why do you use the figures for absorbed overheads rather than the actuals

Cheers

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:June 2004 question 1.6 Help!

    You worked out the direct labour figure in 1.2

    I'm hoping that someone has a better answer to your second question than 'because you do' - which is the best I can come up with :?

    Chris
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:June 2004 question 1.6 Help!

    Hi, Just a thought but I wonder if you use the absorbed figure instead of the actuals, because this is what you would have been using to cost all year. Not sure though.
    I'm still getting things wrong that I thought I knew :cry:
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:June 2004 question 1.6 Help!

    That sounds reasonable to me. You'll only know the actuals after the production is complete (or at the period end) and then you adjust for over/under absorbtion.

    You'll need to make pricing decisions before you start selling so it makes sense that costing will be done on budgeted rather than actual figures.

    Chris

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:June 2004 question 1.6 Help!

    just n case you've still not found the figure for direct labour we had to work it out for task 1.2
    and yes i've just spent 15 minutes looking for it before i read your question becasue i'd on it not lol

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