Page 327 - F2 - MA Integrated Workbook STUDENT 2018-19
P. 327
Budgeting
Flex the budget based on cost behaviours:
Direct materials = 130,000/10,000 × 15,000 = 195,000
Direct labour = 74,000/10,000 × 15,000 = 111,000
Production overheads – high low method
VC = (109,000 – 88,000)/(13,000 – 10,000) = $7 per unit
FC = 109,000 – (13,000 × 7) = $18,000
Total cost at 15,000 units = 18,000 + (15,000 × 7) =123,000
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