Activity based budgeting question

Hi all, I'm currently stuck on a question about activity-based budgeting, from a colin Drury book and was wondering if anyone could help. im struggling to work out the variable production o/h and fixed production o/h. According to the answer, the variable production o/h is £18000 and the fixed production o/h is £16000

A company manufactures one product and is experiencing a current depression in the market. Currently, it is operating at a normal level of activity of 70% which represents an output of 6300 units.
However the sales director believes that a realistic forecast for the next budget period would be a level of activity of 50%.
Information: 60% 70% 80%
Direct materials 37800 44100 50400
Direct wages 16200 18900 21600
Production overhead 37600 41200 44800
Administration overhead 31500 31500 31500
Selling and distribution overhead 42300 44100 45900
Total cost 165400 179800 194200

Profit is 20% of selling price.

Prepare a budget based on a level of activity of 50% which should show the contribution which can be expected.

if anyone could help me quickly that would fantastic, iv looked everywhere and just can't find how to.
thank you very much


  • hal978
    hal978 Registered Posts: 197 Dedicated contributor 🦉
    You should use the High-Low method to work out the:
    - Fixed production o/h
    - Variable production o/h per unit
    - Variable production o/h.
  • nebth444
    nebth444 Registered Posts: 4
    ahhh that will be it, thank you so much for the help, spent the past few hours just in a loop around google!

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