Cost & Revenues Practice 2 help!

On the AAT website, the cost & revenues practice test 2....
1.5 part C, how on earth do you get 875 as the answer?! I emailed my tutor but I think they are behind on emails as I havent had a response yet can anyone please help :crying:

I am getting way higher figures and just cant see how.

Comments

  • Haysah
    Haysah Registered Posts: 80 Epic contributor 🐘
    Because you take your OAR of 22.50 and X it by the number of Actual direct labour hours of 4250 hrs = 95625 gives you what you have actually used, then take it off your actual over heads 96500 off 95625 Actual direct labour hours = 875 under absorbed. Well that is how it works for me :) x
  • Clarekaye
    Clarekaye Registered Posts: 307
    Ahhh I see, it didnt say anywhere just direct labour hours, I was using the whole overhead cost.
    Thank you!
  • Haysah
    Haysah Registered Posts: 80 Epic contributor 🐘
    You are welcome. Happy to help, it helps me to make it stick for me to by helping you.:thumbup1:
  • Clarekaye
    Clarekaye Registered Posts: 307
    Have you done your C&R exam yet?
    Mine is friday and I am starting to freak, I cant do a marginal/absorption income statement without messing up the closing stock figures and I been trying so hard to remember things like how to work out margin of safety I forgot how to work out a marginal cost of something :ohmy:
  • Haysah
    Haysah Registered Posts: 80 Epic contributor 🐘
    Hi,

    I have mine Wednesday, dreading it is not the word. marginal and absorption, I am cool with just remember to add back in your fixed cost for full absorption costing. Margin of safety is your number of units in sales less your breakeven in units. Well something must be sticking :s Good luck for your exam.:001_smile: Let me know how you do.
  • Clarekaye
    Clarekaye Registered Posts: 307
    I just got back a mock exam from my tutor and the breakeven for revenue she worked out a REALLY easy way, I thought you had to work out the pv ratio, but all she did was take the BEP in units x selling price Simple!

    Aw you shouldnt dread it, its exciting, your given the chance to put all your hard work on show and IF we fail we can just retake, the aat seem to have really high pass marks (you have to get alot of it right) but we just feel even more awesome when we do pass them :001_tongue: Good luck for tomorrow let us know!
  • Haysah
    Haysah Registered Posts: 80 Epic contributor 🐘
    I passed so please this one is done :) Thanks by the way and good luck Friday let me know how it goes:thumbup1:
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