Fixed variable_ semi variable

[K_Z]

I could not answer variable/semi-variable
TRL has produced three forecasts of activity levels for the next period for one size of its memory sticks. The original budget involved producing 30,000 memory sticks, but production levels of between 40,000 and 50,000 memory sticks are now expected.

Notes:
• TRL receives a discount of 15% on any extra direct materials purchases in excess of those required for 40,000 memory sticks.
• Additional indirect labour is needed for production volumes greater than 30,000 memory sticks. This will increase indirect labour costs by 25%.

(a) Complete the table below to calculate the production cost per memory stick (in £,
to 4 decimal places) at the different activity levels.

Memory sticks made 30,000 40,000 50,000
Costs: £ £ £
Variable/semi-variable costs:
• Direct materials 6,000
• Direct labour 9,600
• Overheads 7,500
Fixed /semi-fixed costs:
• Indirect labour 10,000
• Overheads 15,200

Total cost
48,300
Cost per memory stick 1.6100

 

[Triest123]

Memory sticks made 30,000 40,000 50,000
Costs: £ £ £
Variable/semi-variable costs:
Direct materials 6,000 6,800 8,500
Direct labour 9,600 12,800 16,000
Overheads 7,500 10,000 12,500
Fixed /semi-fixed costs:
Indirect labour 10,000 12,500 12,500
Overheads 15,200 15,200 15,200

Total cost 48,300 57,300 64,700

Cost per memory stick 1.6100 1.4325 1.2940


Note :
1. Direct materials costs per unit when the production level exceeds 30,000 units
= $6000 / 30,000 units x 0.85 = $0.17

2. Total Indirect labout costs when the production level exceeds 30,000 units
= $10,000 x 1.25 = $12,500