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ACCA F2 / FIA FMA lectures
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November 23, 2015 at 2:06 pm
is it the only way, what i mean is, would it be right if we calculate the overhead cost per unit instead of overhead per hour?what makes the difference?
John Moffat says
November 23, 2015 at 2:12 pm
If you watch all of the lectures for this chapter, then this is all explained.
If there is only one product then overhead per unit would be the same as overhead per hour.
However, if (for example) you have one product that takes 1 hour per unit to produce, and another product that takes 2 hours per unit to produce, then it is only sensible to charge the second product with twice as much overheads per unit that the first product.
We achieve this by calculating a cost per hour, and then a cost per unit by multiplying the cost per hour by the number of hours per unit.
March 11, 2015 at 11:44 pm
I’ve attempted to do the test on this chapter, but can’t quite get the right answer to question 3. I get $10 and the answer is $13. My workings are the following. Total Overhead costs for Product X = 88,000 divide that by total hours worked on Product X (8000 *2.5) answer is 4.4, same thing for product Y (96,000/16000) = 6. Therefore, total overhead cost per unit is 10. What am I missing? Thanks in advance for the help
March 12, 2015 at 7:18 am
I think you are referring to test question 4 (not 3).
Look back at the way I answered example 3 in the lecture, because it is exactly the same idea.
You need to work out an absorption rate for each of the two departments separately.
There are no products X and Y – they are departments. The products are L and M.
So the absorption rate for department X is $88,000 / (( 8,000 x 3.0) + (8,000 x 2.5)) = $2 per hour.
You need to do the same for department Y.
Then you can calculate the cost per unit for M as 2.5 hours at $2, plus 2 hours at the absorption rate for department Y.
March 12, 2015 at 6:58 pm
Yes, it was indeed question 4, and the Products X and Y that I was referring to were supposed to be L and M, apologies for the confusion. I got the right answer now. My mistake was to calculate the overhead costs by product (i.e. picking the numbers horizontally) instead of by department (then multiplying by the number of hours it takes for each product). Is it safe to say that that is the correct approach every time? i.e. to calculate departmental absorption cost first?
March 13, 2015 at 7:48 am
Yes – you are correct
BELLO OLAIDE TITUS says
February 2, 2015 at 6:35 pm
I could view it before December diet, but it all started few days to exams
February 2, 2015 at 8:15 pm
But you have not answered my question. Are you able to view the lectures on computer? Is all access not working, or just access on your phone?
February 2, 2015 at 5:09 pm
Sir, I used to see your lecture videos on my android phone but, suddenly the browser just stopped working and up till now, I have not been able to see the videos again. I also downloaded several browsers but no result. Please what can I do? Or have you restricted people from Nigeria from viewing your videos?
February 2, 2015 at 5:13 pm
We do not restrict any countries (although countries might restrict us!).
Is it only the phone (can you view the lectures on a computer)?
February 2, 2015 at 2:46 pm
i want to ask you that i looked many questions on under/over absorption in bpp kit but i didnt see any lectures on it and also in course notes so please tell me is it in course of f2 in 2015 because i have old edition book of bpp
February 2, 2015 at 5:02 pm
Under/over absorption is part of absorption costing and is dealt with in that lecture.
It is in the current syllabus.
(Although you should get a current edition of the Revision Kit because the format of the exam has changed.)
February 3, 2015 at 7:27 am
February 2, 2015 at 2:29 pm
i want to ask you that i look many questions on under/over absorption in bpp kit but i didnt see any lectures on it and also in course notes……so please tel me is it in course or not because i have a book of bpp 2011 edition….
October 18, 2014 at 11:01 am
Hello sir John, I really enjoyed the way you teach Pls where can I found the complete part of this example 3. You didn’t finish it in the video.
October 18, 2014 at 12:56 pm
This lecture says ‘part (a)’, so now watch part (b)
January 29, 2015 at 5:08 pm
I like you very much and your lectures as well :)))))) Thank you .
January 29, 2015 at 5:24 pm
Thank you very much
Kerri - Ann says
August 5, 2014 at 7:01 pm
I used the production to do my overhead absorption…… 3:2 Ratio
Desk = 700000*3/5 = 420000/30000 = $14.00
Chair= 700000*2/5 = 280000/20000= $14.00
I know that this is not correct based on your explanation. But can you explain yes we are using the production hours and not the production units?
August 6, 2014 at 5:38 am
In real life you can deal with the overheads in whichever way you think more sensible.
In exams you are told how to absorb them, and this questions says in the last line that they are to be absorbed on the basis of labour hours.
The logic is that if each desk takes 4 times as long as a chair in the factory, then it would seem only fair that they should be charged with 4 times as much in factory overheads.
(Had the question said to absorb on a unit basis, then your answer would be correct. Although you made it too complicated – all you would need to do is divide total overheads by total unit – $700000/50000 = $14 per unit)
Max Huelber says
July 17, 2014 at 6:25 pm
i’d like to know where i can find in here the financial accounting subject??
July 17, 2014 at 6:33 pm
It depends which paper you want.
There are three financial accounting papers – they are F3, F7 and P2 (F3 is the basic – P2 is the most advanced)
You can find links to then from the main ACCA page.
February 12, 2014 at 9:30 am
please sir where i can find accounting for labour and materials ?
February 12, 2014 at 1:04 pm
Accounting for labour is chapter 6 in the Course Notes.
There is no separate chapter for materials – the important part is covered in chapter 5, inventory control.
February 13, 2014 at 2:10 pm
February 13, 2014 at 4:30 pm
Sir moffat, I got a personal question. I already passed my F3 ( 26 th dec 2013 ). But on my examination status on acca global it said that F3 financial accounting to be attempted. Why it didn’t said that i pass. I got 54 % and was taking private tuition with a tutor.
February 13, 2014 at 4:41 pm
I assume that you took the computer based exam and that it was at a licensed centre?
The firm of tutors that administered the exam should have uploaded the result to the ACCA and it should then have appeared on your account within 72 hours.
Did you receive a provision notification of your result immediately you finished the exam?
You need to contact the place where you took the exam and ask what has happened. If they do not sort it out then you need to email the ACCA as soon as possible.
February 13, 2014 at 5:20 pm
Yes i took a CBE exam and it was a licensed centre. I received an email from the admin of acca global on 27 th dec confirming that i passed my F3 but it still don’t appear on my examination status. I hope that i won’t have to take the exam again
February 13, 2014 at 7:48 pm
You certainly will not have to take the exam again.
However I would email the ACCA and ask them why it does not appear on your status.
February 15, 2014 at 10:02 am
done ! thank you sir 😀
February 8, 2014 at 9:54 pm
Regarding example 2:
I know this is wrong, but WHY couldnt you work out FIXED COSTS fro desks and chairs as follows:
LBR HRS for desks = 30 000 x 4 = 120 000
And so Fixed costs per desk = 700 000/120000 = 5.83
LBR HRS for chairs = 20 000 x 1 = 20 000
And so Fixed costs per chair = 700 000/20 000 = 35
February 8, 2014 at 10:08 pm
But then the total fixed costs would add up to 1.4M !!!
February 6, 2014 at 5:10 am
Theory from this chapter is not important for the exam ?
February 6, 2014 at 5:26 am
There is no theory involved in this.
October 15, 2013 at 9:58 pm
Awesome lecture Mr.John Moffat you explain so well, may god bless you……
October 15, 2013 at 1:53 am
thank you johnmoffat. I appreciate.God’s blessings
October 15, 2013 at 4:35 am
You are welcome
October 14, 2013 at 5:59 pm
Hi would appreciate help with his Question
The following Data relates to a company’s Overhead Cost
time: 3 yrs ;OutPut (unit) 2000 : O/H Cost 8,800: Price Index 132
Current year: Output (unit) 5000: O/H Cost 31000: Price Index 164
Using the High Low Technique. what is the Variable cost per unit ( to the nearest $0.01) express in the current year.
October 14, 2013 at 6:11 pm
What you need to do is restate the ‘3 years’ (I assume you mean three years ago) in current year prices.
To do this, you take the cost in the question (8800) and multiply it by 164/132.
When you have done this, you can use the normal high/low technique and the variable cost that you calculate will be in current year prices.
May 16, 2013 at 3:00 pm
Yeah I do love this site. Thank for everything. The way you explain is very sensible.
May 14, 2013 at 11:20 am
please where can i find accounting for labour????
May 14, 2013 at 4:07 pm
You can find a chapter on it in the course notes. The chapter should be understandable without the need for a lecture.
May 15, 2013 at 10:16 am
March 4, 2013 at 12:22 pm
Hello i dont understand at 5:10 Why exactly do we divide, i dont get the theroy side to it
March 4, 2013 at 1:01 pm
We are trying to calculate the cost of 1 desk. If it costs $700,000 to make 50,000 units, then the cost of each unit is $700,000 / 50,000. There is no theory to it
March 4, 2013 at 3:26 pm
Ahh, Okay Thank You I sometimes over think and complicate things – Thank You sir! :):D
February 26, 2013 at 11:28 am
rubaiyat amir says
January 17, 2013 at 9:15 pm
great job guys…. these site is just awesome….
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