PEV 2004 section 1 query

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
On section 1.1 (v) they ask for the budgted production overheads. I worked the answer out as 20,000, but in the AAT answer book they have 18,000. who is the one that is wrong and why?

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    PEV 2004 section 1 query

    We had this question answered at college last night! My tutor tells me that they have actually got it wrong. The answer is 20,000 not 18,000 as budgeted is 1000 units x £20.00 not 900.<BR><BR>So much for studying from the past papers!!<BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    PEV 2004 section 1 query

    no its not they ask for the amount of overhead OBSORBED IN MAY which is 900 x 20 = 18000
  • System
    System Posts: 100,534 🤖 Admin 🤖
    PEV 2004 section 1 query

    Thanks for that, I emailed my tutor and he said the same they are actually asking for budgeted production overheads, which is 1000 x 20, which is 20,000. Also the fixed overhead volume variance is 20,000 less the 23,000, which gives you the variance of 3,000.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    PEV 2004 section 1 query

    The budgeted overhead is £20,000<BR>The fixed overhead expenditure variance is £3,000 adverse<BR>The fixed overhead volume variance is £2,000 adverse<BR><BR>sandy.hood@chichester.ac.uk<BR><BR>I can send my answer to this section if you email me<BR>

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