Online Mock on the AAT website paper 1 question 1.3
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BradleyClaridge
Registered Posts: 30
Hi,
could anybody help me with how they have worked out the production costs for this question?
I have worked out the sales and the opening inventory but can't seem to work out how they got the production costs.
Thank you
Bradley
could anybody help me with how they have worked out the production costs for this question?
I have worked out the sales and the opening inventory but can't seem to work out how they got the production costs.
Thank you
Bradley
I'm currently studying AAT Level 4! as part of my Finance Apprenticeship
0
Comments
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Production Cost
10,000 units produced
Direct Material = £15/unit x 10,000 = £150,000
Direct Labour = £10/unit x 10,000 = £100,000
Other Variable Costs = £250,000
TOTAL =£500,000
Marginal Production Cost = £500,000
Absorption Production Cost = £950,000 (absorption production cost includes 450k of fixed overheads)
0
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