AATQB Posts: 17 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?

• Registered, MAAT, AATQB Posts: 33 Regular contributor ⭐ 😼 ⭐
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 Leyland
• AATQB Posts: 17 New contributor 🐸
edited July 7
Sorry this is the question not sure where to start with the fixed cost variances
• AATQB Posts: 17 New contributor 🐸
Question
• Registered, MAAT, AATQB Posts: 33 Regular contributor ⭐ 😼 ⭐
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 Leyland
• AATQB Posts: 17 New contributor 🐸
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 information
• Registered, MAAT, AATQB Posts: 33 Regular contributor ⭐ 😼 ⭐
edited July 16
Hopefully this give you some help working it out. The fixed overhead remember the costs should not change.

RegardsCiaran Andrew Leyland