Question B3 Aberdeen Ltd is preparing its labour and overhead budget for Department Y for 2012. It wishes to identify likely costs at 75%; 90% and 100% of capacity. The following information is relevant: > Direct labour rate is £12.00 per hour > 100% capacity would represent 80,000 direct labour hours > Variable costs - Indirect labour charged at £1.50 per direct labour hour - Consumables charged at £0.50 per direct labour hour Canteen costs at 5% of direct and indirect labour > Seml-variable costs are expected to relate to direct labour hours as over the previous three years:
Question B3 Aberdeen Ltd is preparing its labour and overhead budget for Department Y for 2012. It wishes to identify likely costs at 75%; 90% and 100% of capacity. The following information is relevant: > Direct labour rate is £12.00 per hour > 100% capacity would represent 80,000 direct labour hours > Variable costs - Indirect labour charged at £1.50 per direct labour hour - Consumables charged at £0.50 per direct labour hour Canteen costs at 5% of direct and indirect labour > Seml-variable costs are expected to relate to direct labour hours as over the previous three years:
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Question B3
Aberdeen Ltd is preparing its labour and overhead budget for Department Y for 2012.
It wishes to identify likely costs at 75%; 90% and 100% of capacity.
The following Information is relevant:
> Direct labour rate is £12.00 per hour
> 100% capacity would represent 80,000 direct labour hours
> Variable costs
Indirect labour charged at £1.50 per direct labour hour
Consumables charged at £0.50 per direct labour hour
Canteen costs at 5% of direct and indirect labour
> Seml-variable costs are expected to relate to direct labour hours as over
the previous three years:
Year
2009
2010
2011
Direct labour hours
50,000
55,000
58,000
Semi-variable cost
E30,000
E32,000
£33,200
> Fixed costs
Depgeciation £35,000
Maintenance £42,000
Insurance £7,000
Rent
Management salaries £105,000
£38,000
Required
(a)
Draft the flexed budgets for Department Y of Aberdeen Ltd at the relevant
levels of operational capacity.
(b)
Estimate the budgetary cost for Department Y if it operated at 95% of
capacity.
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