Home For AAT student members AQ 2016 Foundation Certificate in accounting Elements of Costing
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Can someone show me the working out for the following question please?

AdamG09AdamG09 Registered Posts: 2
I have attached a PDF file of the question.

Best Answer

  • Pian32Pian32 Posts: 144
    Accepted Answer
    Overhead absorbtion rate:

    Total Overhead Costs/ Total of absorbtion factor e.g for Labour £245,000/17,500 = £14

    Your direct materials and direct labour are as stated in the question

    The overhead cost is the Absorbtion rate (from the 1st row) * amount of factor used e.g for labour £14*2 =£28

    Final row just add the costs

    Hope this helps.
    AAT Level 4, MAAT


  • AdamG09AdamG09 Registered Posts: 2
    Thank you. I'm also struggling on this question. The direct labour cost is split into £11 per hour and i'm not sure how to complete the task.
  • Pian32Pian32 Registered Posts: 144
    If the direct labour cost is stated as £11 per hour (rather than simply £11) then you just need to multiply it by the number of hours for the product. You didn't post the question so for example if something took 0.5 hours the DLC would be 11*0.5=£5.5 but if it was 3 hours then 11*3= £33
    AAT Level 4, MAAT
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