TASK 8B PAPER 1
Nataliedory
Registered Posts: 26
Comments
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Hi Nat,
the key for this task is that the fixed overheads are absorbed on BUDGETED LABOUR HOURS, be careful because it could be machine hours or units on the exam
As it is labour hours we have to scroll up and see how much labour hours each unit is using
Rose 3h and Thyme 2h per unit
Therefore 50000unitsx3h=150000h are budgeted for Rose
25000unitsx2h=50000h are budgeted for Thyme
We use this data to calculate the OAR=£400000+£600000/150000h+50000h=£5
SO for every labour hour we absorb £5 fixed overheads, therefore
Rose 150000hx£5=£750000
Thyme 50000hx£5=£250000
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