WQT Co manufactures a single product and an extract from their flexed budget for production costs is as follows. Activity level 80% 90% $ $ Direct material 2,400 2,700 Labour 2,120 2,160 Production overhead 4,060 4,080 8,580 8,940 What would the total production cost allowance be in a budget flexed at the 83% level of activity? (to the nearest $)
A、$6,266
B、$6,888
C、$8,586
D、$8,688
A、$6,266
B、$6,888
C、$8,586
D、$8,688
【参考答案及解析】
The total production cost allowance in a budget flexed at the 83% level of activity would be $8,688 (to the nearest $) Direct material cost per 1% = $30 Labour and production overhead： $ At 90% activity 6,240 At 80% activity 6,180 Change 10% 60 Variable cost per 1% activity =$60/10% =$6 Substituting in 80% activity： Fixed cost of labour and production overhead =$6,180-(80x$6) =$5,700 Flexed budget cost allowance: $ Direct material $30 x 83 2,490 Labour and production overhead： variable $6 x 83 498 fixed 5,700 8,688
The total production cost allowance in a budget flexed at the 83% level of activity would be $8,688 (to the nearest $) Direct material cost per 1% = $30 Labour and production overhead： $ At 90% activity 6,240 At 80% activity 6,180 Change 10% 60 Variable cost per 1% activity =$60/10% =$6 Substituting in 80% activity： Fixed cost of labour and production overhead =$6,180-(80x$6) =$5,700 Flexed budget cost allowance: $ Direct material $30 x 83 2,490 Labour and production overhead： variable $6 x 83 498 fixed 5,700 8,688