Sales Revenue

Options
sophie_612
sophie_612 Registered Posts: 136 Dedicated contributor 🦉
in Management Accounting: Budgeting
Hi,

can someone help me on the below I've worked out someone of the answers but the other i cannot work out.

thanks
Sophie

Comments

  • sophie_612
    sophie_612 Registered Posts: 136 Dedicated contributor 🦉
    Options

  • Cheesypeesy
    Cheesypeesy Registered Posts: 101
    Options
    Sales revenue in April - (£1,594,600/238,000) * 20,000 = £134,000

    Direct labour
    Total labour hours in April - 21,000/6 = 3500
    Total hours worked overtime = 3500-3300 = 200. Overtime rate = 15*1.4 = £21.00 per hour.
    Direct labour cost - (3300*15) + (200*21) = £53,700.

    Variable production overhead
    Total hours for year - 246,000/6 = 41,000 hours
    Variable production overhead per hour - 95,940/41,000 = £2.34
    Variable overhead production overheads in April - £2.34 * 3500 = £8,190.
    Matthew Dearlove MAAT
    Currently on CIMA Management Level. Passed P2, F2 and E2. Preparing for November 19 MCS.
  • sophie_612
    sophie_612 Registered Posts: 136 Dedicated contributor 🦉
    Options
    Cheesypeesy said:

    Sales revenue in April - (£1,594,600/238,000) * 20,000 = £134,000

    Direct labour
    Total labour hours in April - 21,000/6 = 3500
    Total hours worked overtime = 3500-3300 = 200. Overtime rate = 15*1.4 = £21.00 per hour.
    Direct labour cost - (3300*15) + (200*21) = £53,700.

    Variable production overhead
    Total hours for year - 246,000/6 = 41,000 hours
    Variable production overhead per hour - 95,940/41,000 = £2.34
    Variable overhead production overheads in April - £2.34 * 3500 = £8,190.

    thanks @Cheesypeesy why is that we are dividing by 6?
  • daniel_123456
    daniel_123456 Registered Posts: 25
    Options
    It is because each units require 10 minutes of direct labour each. Their is 6 sets of 10 minutes in 1 hour.
    You can also do the calculation as 21000*10/60=3500 hours
  • sophie_612
    sophie_612 Registered Posts: 136 Dedicated contributor 🦉
    Options
    daniel_123456 said:

    It is because each units require 10 minutes of direct labour each. Their is 6 sets of 10 minutes in 1 hour.
    You can also do the calculation as 21000*10/60=3500 hours

    thanks so much that makes sense now :)

Categories

Privacy Policy