Budgeting assessment

Roselyn

Hi all, I am bit on task 4b. from aat assessment 1 don't understand how to calculate variable production overhead.
Please help

N4T

What is the question? I don't have access to AQ2016.

Zoynal98

Hi Roselyn,

Please see below the workings for Task 4 (b) (AQ2013 Sample Assessment 1):

Sales Revenue: (£1,166,400/216,000 units)*18200 units = £98,280
Material Used: (18,000 units*3 kg/unit)*£0.75/kg = £40,500
Direct Labour: ((18,000 units*5 mins/unit)*60mins = 1500 hours) 1500hrs - 1250hrs = 250hrs (Overtime)
Basic = 1250hrs*£16/hr = £20,000 + (250hrs*(£16*1.5 (50%)) = £26,000
Variable Production overhead: (£77,000/210,000 units)*18,000 units (Units produced relating to April) = £6,600
Fixed production overhead: £13,200/12months = £1,100

Hope this helps.