ACCA Applied Knowledge · Management Accounting · Spreadsheets
In a budget spreadsheet, cell B1 holds an overhead absorption rate of 4.50. Cell A5 holds labour hours of 2,000. The formula in C5 is to be copied down a column of different labour hours in A6, A7 and so on, always using the rate in B1. Which formula should be entered in C5?
The correct formula is =A5*$B$1. The labour hours reference must be relative so that it moves down with each row, while the overhead rate in B1 must be absolute so that every copied formula still points at that single cell.
- A=A5*B1
- B=A5*$B$1Correct
- C=$A$5*B1
- D=A5*B$5
Explanation
The hours reference must change as the formula is copied down, so A5 stays relative. The rate in B1 must stay fixed, so it needs an absolute reference $B$1. Option =$A$5*B1 fixes the wrong cell and lets the rate drift to B2, B3 and so on.
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