standard absorption cost

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
hi...cud do wid some help! i fink i know how to calculate standard absorption cost but i just want to make sure again! thanks

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:standard absorption cost

    The standard absorption cost of a product is made up of:-
      the material cost per unit
      the labour cost per unit
      the overhead absorbed per unit

    For example:-
    A Milward is made of:-
    3kg of material at £5 per kg
    2 hours of skilled labour at £9.00 per hour
    2 hours of machine time at an overhead absorption rate of £14.00 per machine hour

    So the absorption cost is
    £15
    £18
    £28
    £61 per per unit
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:standard absorption cost

    lol ma guess was correct! thank u! :D

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