PEV June 2008 Q2.2 a&b 3
lilac_angel
Registered Posts: 66 Regular contributor ⭐
Hi All,
can anyone help me with this question. i don't understand how Voltairs avoidable production costs equal Answer A1-A2 and B1-B2.
I would have thought the avoidable costs were the 1.95 million from the notes divided by 10,000.
Would be very greatful if anyone could help me.
Thanks
can anyone help me with this question. i don't understand how Voltairs avoidable production costs equal Answer A1-A2 and B1-B2.
I would have thought the avoidable costs were the 1.95 million from the notes divided by 10,000.
Would be very greatful if anyone could help me.
Thanks
0
Comments
-
I think the workings are as below?
The answer to a (i) is all production costs per turbine as follows:
Materials £3,000,000 (detailed in the question as a cost to be saved, so avoidable)
Labour £2,000,000 (as above)
O/heads £3,000,000 (detailed in the question as £1,050,000 unavoidable, £1,950,000 avoidable)
Total = £8,000,000/ 10,000 = total production cost of £800 per turbine
So it follows that when the unavoidable fixed production cost per turbine is calculated at (£1,050,000/ 10,000) = £105 per turbine at question (ii) the remaining costs are all avoidable, so £800 - £105 = answer to question (iii) £695 avoidable production cost per turbine.0 -
Thanks for your help. i understand now0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 323 NEW! Qualifications 2022
- 165 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 88 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 273 Tax
- 135 Bookkeeping
- 7.2K General accounting discussion
- 200 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership