Sales Revenue

sophie_612

Hi,

can someone help me on the below I've worked out someone of the answers but the other i cannot work out.

thanks
Sophie

sophie_612

Cheesypeesy

Sales revenue in April - (£1,594,600/238,000) * 20,000 = £134,000

Direct labour
Total labour hours in April - 21,000/6 = 3500
Total hours worked overtime = 3500-3300 = 200. Overtime rate = 15*1.4 = £21.00 per hour.
Direct labour cost - (3300*15) + (200*21) = £53,700.

Variable production overhead
Total hours for year - 246,000/6 = 41,000 hours
Variable production overhead per hour - 95,940/41,000 = £2.34
Variable overhead production overheads in April - £2.34 * 3500 = £8,190.

sophie_612

Cheesypeesy said:

Sales revenue in April - (£1,594,600/238,000) * 20,000 = £134,000

Direct labour
Total labour hours in April - 21,000/6 = 3500
Total hours worked overtime = 3500-3300 = 200. Overtime rate = 15*1.4 = £21.00 per hour.
Direct labour cost - (3300*15) + (200*21) = £53,700.

Variable production overhead
Total hours for year - 246,000/6 = 41,000 hours
Variable production overhead per hour - 95,940/41,000 = £2.34
Variable overhead production overheads in April - £2.34 * 3500 = £8,190.

thanks @Cheesypeesy why is that we are dividing by 6?

daniel_123456

It is because each units require 10 minutes of direct labour each. Their is 6 sets of 10 minutes in 1 hour.
You can also do the calculation as 21000*10/60=3500 hours

sophie_612

daniel_123456 said:

It is because each units require 10 minutes of direct labour each. Their is 6 sets of 10 minutes in 1 hour.
You can also do the calculation as 21000*10/60=3500 hours

thanks so much that makes sense now