Dec 07 PEV

Hi Everyone

And good luck to anyone taking exams this week.

I am doing a bit of last minute study, so maybe I have overfilled my brain, but I am working on Dec 07 PEV Task 1.1 Section B iv - Fixed Capacity Variance, and I cannot see how they worked out the budgeted labour hours to 1600.

I assume it is very easy, and that I am missing the obvious, bur if anyone could assist I would be most grateful.

Kind regards



  • SandyHood
    SandyHood Registered, Moderator Posts: 2,034
    Fixed overheads are absorbed on a labour hour basis: £50.00 per labour hour

    Budgeted production was 80,000 x 100 bag boxes (at 0.2 hrs per box) so 80,000 x 0.02hrs/box = 1,600 budgeted hours.

    Does that help?
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  • columbia
    columbia Registered Posts: 580
    Thanks Sandy

    I feel really silly now as that was sooooo obvious!!!

    Time for a coffee and 5 mins relaxation I think!

    Thanks again

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