Practice exam 2 - task 5; can someone explain?

I got the first part of the question correct when working out the absorption rates as follows:
machine hr £12
labour hr £6
unit £4

So why, then, does part (b) of the answer give the overhead absorption rates as:
machine hr £2
labour hr £3
unit £4

????

Comments

  • Pian32
    Pian32 Registered Posts: 474 Dedicated contributor 🦉
    So each machine hour absorbs £12 but each unit only takes 10mins of machine time so only absorbs 12/6 = £2. Same for labour 30 mins so 6/2=£3
    AAT Level 4, MAAT
    ACCA in progress
    F4- Passed Aug 2020
    F5- Passed Dec 2020
    F6- Passed Sep 2020
    F7- Passed June 2021
    F8 - Passed Sep 2021
    F9 - Passed June 2021

    SBL -
    SBR - Passed Mar 22
    ATX - Passed Dec 21
    APM - Passed June 22
  • Tabitha005
    Tabitha005 Registered Posts: 9
    Thank you for responding. Stupidly, I hadn't fully read the question - that'll teach me!
  • stefania
    stefania Registered Posts: 6
    Can someone explain please how do you get £18.50 on direct cost?! I need to find a logical way to understand it!!! Thanks
  • Pian32
    Pian32 Registered Posts: 474 Dedicated contributor 🦉
    Hi Stefania

    I can't see the full question only what was above. Direct costs are things that are directly required for the product. So materials, labour etc the rent and heating would be indirect as they are paid independant of the product produced.
    AAT Level 4, MAAT
    ACCA in progress
    F4- Passed Aug 2020
    F5- Passed Dec 2020
    F6- Passed Sep 2020
    F7- Passed June 2021
    F8 - Passed Sep 2021
    F9 - Passed June 2021

    SBL -
    SBR - Passed Mar 22
    ATX - Passed Dec 21
    APM - Passed June 22
  • stefania
    stefania Registered Posts: 6
    Hi,
    I hope the picture attached is clear enough.
    Thank you!!!
  • stefania
    stefania Registered Posts: 6
    Hi,
    I hope the picture attached is clear enough.
    Thank you!!!
  • stefania
    stefania Registered Posts: 6
    For s> @Pian32 said:
    > Hi Stefania
    >
    > I can't see the full question only what was above. Direct costs are things that are directly required for the product. So materials, labour etc the rent and heating would be indirect as they are paid independant of the product produced.

    For some reason it doesn't let me attach a picture. Is there any other way I can send it to you?!
  • stefania
    stefania Registered Posts: 6
    For s> @Pian32 said:
    > Hi Stefania
    >
    > I can't see the full question only what was above. Direct costs are things that are directly required for the product. So materials, labour etc the rent and heating would be indirect as they are paid independant of the product produced.

    For some reason it doesn't let me attach a picture. Is there any other way I can send it to you?!
  • stefania
    stefania Registered Posts: 6
    For s> @Pian32 said:
    > Hi Stefania
    >
    > I can't see the full question only what was above. Direct costs are things that are directly required for the product. So materials, labour etc the rent and heating would be indirect as they are paid independant of the product produced.

    For some reason it doesn't let me attach a picture. Is there any other way I can send it to you?!
Privacy Policy