ABC Costing Unit 8 Kaplan Book

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anniebabe
anniebabe Registered Posts: 595 Epic contributor 🐘
in AAT Level 4 (Level 8 in Scotland)
Please can someone try and help me with this:-

I am trying to work through Page 56 (Kaplan unit 8/9 NVQ) Activity 2 - Products X and Y
answers on page 69.

Stuck on the Labour Supervision part

where do they get the figure 47500 from?

any help much appreciated.

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  • anniebabe
    anniebabe Registered Posts: 595 Epic contributor 🐘
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    Aww - can no one help me with this one? :(
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
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    If you type the question out I will try and help.
  • anniebabe
    anniebabe Registered Posts: 595 Epic contributor 🐘
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    Products X and Y

    Calculate the unit cost of products X and Y, where products X and Y are sole output of the business:

    Product X Product Y

    Units produced 45000, 5000
    Materials cost per unit £1.50, £4.00
    Direct Labour per unit £7.00, £3.50
    Direct Labour time per unit 1 hr 30 mins
    Number of set ups 30, 10
    Number of purchase orders 70, 10
    Overhead costs:
    Set up £20,000
    Purchasing £16,000
    Labour supervision £23,750

    Labour supervision

    23750
    47500 50 p per labour hour
  • anniebabe
    anniebabe Registered Posts: 595 Epic contributor 🐘
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    Just got lost with calculating the Labour supervision - not sure where they got the figure

    47500 from

    If anyone could help?

    Many thanks
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
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    I don't get the 47500, I thought the question lists total supervision costs as 23750?
  • anniebabe
    anniebabe Registered Posts: 595 Epic contributor 🐘
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    yep! I am confused
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
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    X Y
    labour 7.00 3.50
    material 1.50 4.00
    o/h per unit 1.14 1.65

    Total 9.64 9.15

    I got this after some rough calculations?
  • anniebabe
    anniebabe Registered Posts: 595 Epic contributor 🐘
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    in the answers they have
    Material cost 1.50, 4.00
    Labour 7.00, 3.50
    Total 8.50, 7.50
    Set up £500 per set up
    Purchasing £200 per order
    Labour supervison 50p per labour hour not sure how they worked this out.
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
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    anniebabe wrote: »
    Labour supervison 50p per labour hour not sure how they worked this out.

    Yes that makes snse. Takes 1 hour labour for an X and 0.5 hour for a Y, according to the question.

    So work out the total hours for both products and apportion the supervisor cost over it.

    Although its not 50p per labour hour, but 50p supervisor cost per £1 of labour cost.

    Direct Labour time per unit 1 hr 30 mins (hours) 1 0.5
    total (units x labour cost per unit) £ 45000 2500
    Apportion superisor cost by labour cost £ 22500 1250
  • sdv
    sdv Registered Posts: 585 Epic contributor 🐘
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    anniebabe wrote: »
    Please can someone try and help me with this:-

    where do they get the figure 47500 from?

    any help much appreciated.

    The answer you are working towards is cost per unit X and Y

    The labour supervison cost (FIXED OVERHERDS) is £23,750

    the labour supervision will be divided by total labour hours used to produce 45,000 units X and 5,000 units Y

    unit X takes 1 hour to make therefore 45,000 units times 1 hour = 45,000 labour hour

    uniy Y takes 30 mins to make therefore 5,000 units times half an hour = 2,500 hours

    Total labours requied = 45,000 + 2,500 = 47,500 labour hours

    labour supervision costs = £23,750 divide by 47,500 hours = £0.50 per hour.

    for unit X = £0.50 times 1 hour = £0.50
    for unit Y = £0.50 times half an hour = £0.25


    hope the above explanation helps
  • anniebabe
    anniebabe Registered Posts: 595 Epic contributor 🐘
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    Yes that all makes sense now ive read it all through again, many many thanks for taking the time to help me.

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