Ecr

Cath BarrettCath Barrett New MemberPosts: 12Registered
oops

Comments

  • GedGed Just Joined Posts: 1Registered
    Cath, I think possibly there was a mistake. The figures were something like:
    Direct Materials per batch £14,500ish
    Direct Labour per batch £43,000ish
    Total Var. Overheads £45,000ish

    Total batches to be made 15,000ish

    If you took the direct costs as were given per batch then divided the Variable cost by the 15,000 batches you got an answer something like:
    Prime Cost = £57,500 per batch
    Variable Overheads= £48,000/15,000 = £3.20 per batch.
  • wilbosswilboss New Member Posts: 5Registered
    Ged wrote: »
    Cath, I think possibly there was a mistake. The figures were something like:
    Direct Materials per batch £14,500ish
    Direct Labour per batch £43,000ish
    Total Var. Overheads £45,000ish

    Total batches to be made 15,000ish

    If you took the direct costs as were given per batch then divided the Variable cost by the 15,000 batches you got an answer something like:
    Prime Cost = £57,500 per batch
    Variable Overheads= £48,000/15,000 = £3.20 per batch.

    That's what I got for variable overheads, but the prime cost needed to be divided by the number of batches to get a sensible answer - I'm pretty certain the 'per batch' comment in the initial figures was put there in error. As an aside I also worked out the prime cost using those figures 'per batch' as read and got a total prime cost figure of about £875,000,000 for the month which was clearly wrong! I passed this on to our exam office so hopefully it got reported back to AAT...
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