What do you mean with "budgeted units" in the context of the pre-determined OH rate? Do you mean all units budgeted to be produced, e.g. 500 units of product A, 200 units of product B and 300 units of product C, totalling up to 1000 budgeted units. Given an OH bucket of $10k that would mean a rate of $10k/1k units=$10 per unit and thus $5k for product A etc.?
Hi Jordan. That is correct. If units is the allocation basis, then you would divide the total budgeted OHs by the total no. of units (i.e. 1000 in your example).
Mr Francois explained this topic amazingly, as a distance student I do a lot of self study and this was so helpful.🙏✨
Thanks so much! :)
This is way much better than the way it was explained in class.
Thank you very much sir.
Thanks for the feedback, Bob!
Well explained, I'm happy as I prepare for my exams
Thanks, Nqobile! Good luck with your exams!
Great tutorial
Understanding the why is soo important, really helped determine when it would be appropriate to apply ABC.
Thank you 🙏🏾
I am so glad to hear that, Ndasilwohenda!
This is very helpful thank you. The pens example is fantastic😂
Hi Busisa. I am so glad to hear that! All the best
What do you mean with "budgeted units" in the context of the pre-determined OH rate? Do you mean all units budgeted to be produced, e.g. 500 units of product A, 200 units of product B and 300 units of product C, totalling up to 1000 budgeted units. Given an OH bucket of $10k that would mean a rate of $10k/1k units=$10 per unit and thus $5k for product A etc.?
Hi Jordan. That is correct. If units is the allocation basis, then you would divide the total budgeted OHs by the total no. of units (i.e. 1000 in your example).
Thanks, this helps
I am so happy to hear that, Lerato!