Fixed overhead cost variances
kelove1
Registered Posts: 16 New contributor 🐸
Please can someone help me with the calculations for a question I am stuck on?
I need to calculate the fixed overhead expenditure and the budgeted overhead standard cost card gives me 1.5 hours @£5 per hour with budgeted output of 14,000 units. If this is based on marginal costing how can I calculate the total budgeted fixed overheads with just this hourly rate?
I need to calculate the fixed overhead expenditure and the budgeted overhead standard cost card gives me 1.5 hours @£5 per hour with budgeted output of 14,000 units. If this is based on marginal costing how can I calculate the total budgeted fixed overheads with just this hourly rate?
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Comments
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The is no fixed cost. If you produced zero unit that would be zero hours in costs. The variable costs is £7.50 per unit. The only way they would be fixed costs if there was minimum payment for the work load (which you have not mentioned)RegardsCiaran Andrew Leyland0
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Sorry this is the question not sure where to start with the fixed cost variances0
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always makes a difference when can see the question. I can see this is about standard costing. I think the answer £105,000 projected 1.5 hours per unit and 14,000 unit means it be 21,000 hours. 21,000 x £5 will be £105,000 but this is answer to question you asked not the answer of the question.RegardsCiaran Andrew Leyland0
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Thanks for your help. With a question like this how would you work out the labour rate and efficency variance? Sorry its just confused me with so much information0
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Hopefully this give you some help working it out. The fixed overhead remember the costs should not change.
RegardsCiaran Andrew Leyland0
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