# Activity Based Question

jlambo21
Registered, AAT Student Posts:

**2**Hello

If anyone can help me with the workings for this please ill be grateful.

Thank you

jlambo21
Registered, AAT Student Posts: **2**

Hello

If anyone can help me with the workings for this please ill be grateful.

Thank you

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## Comments

99With a little search, please see above

101Do the basics first (note that they have reversed these in the table, putting materials first).

Cost driver per production set up is £2,000,000 / 250 (50 + 200) = £8,000

Cost driver per material requisition is £3,500,000 / 875 (175 + 700) = £4,000

Therefore, the total materials handling will be:

Alpha - £4,000 x 175 requisitions = £700,000

Delta - £4,000 x 700 requisitions = £2,800,000

Production set up will be:

Alpha - £8,000 x 50 set ups = £400,000

Delta - £8,000 x 200 set ups = £1,600,000

For b) you are told that it takes Alpha 2 labour hours to complete each unit and Delta uses 1 hour.

For Alpha it will be 2 x 87,500 = 175,000 hours

For Thyme it will be 1 x 100,000 = 100,000 hours

Total is 275,000 hours

Then, work out the hourly rate. So that would be £2,000,000 + £3,500,000 / 275,000 = £20 per hour

Therefore, for Alpha, the calculation will be 200,000 x £20 = £4,000,000

And for Delta, the calculation will be 1,600,000 x £20 = £32,000,000

Total = £36,000,000

101Therefore, for Alpha, the calculation will be 400,000 x £20 = £8,000,000

And for Delta, the calculation will be 1,600,000 x £20 = £32,000,000

Total = £40,000,000

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