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January 20, 2015 at 8:09 am
Dear Sir Please help me with this question please,
An organization has the following total cost at three activity levels:
Activity level (Units): 4000 6000 7500
Total Cost: $40,800 $50,000 $54,800
Variable cost per unit is constant with in this activity range and there is a step up of 10% in total fixed costs when the activity level exceeds 5,500 units,
what is the total cost at an activity level of 5,000 units?
Please help me with this question
John Moffat says
January 20, 2015 at 8:56 am
Please ask this sort of question in the Ask the Tutor Forum – not as a comment on a lecture.
Since 6,000 and 7,500 units are both above 5,500 units, the fixed cost will be the same for both.
So use high-low on these two and calculate the variable cost per unit and the fixed cost in the normal way.
At an activity level of 5,000 units, the variable cost per unit will be as you have calculated and the fixed cost will be 100/110 times what you have calculated.
January 10, 2015 at 5:27 am
sir,can we go through these lectures and course notes for the exam 2015 june & december?
January 10, 2015 at 11:32 am
The syllabus is not changing for June and so any changes to the notes will be very minor.
September 7, 2014 at 10:18 pm
This Website is indeed very helpful. Please Reply my query:
Why Semi-Variable cost Per Unit Graph tend to be downward…?
September 8, 2014 at 6:42 am
Semi-variable is part variable cost and part fixed cost.
The fixed cost per unit falls with higher production (because the total fixed cost stays the same); the variable cost per unit stays constant.
So the total of the two must fall with higher production.
August 26, 2014 at 5:22 pm
Hi. I just want to say that your site is doing an amazing job in teaching us the necessary bits.
However, I would like to know if I should study the kaplan/BPP textbooks or is it only sufficient to go through your sites lectures and notes.
August 26, 2014 at 6:21 pm
You do not really need a Study Text, but you must get a Revision/Exam Kit from one of the approved publishers. They contain lots of exam-standard questions and lots of practice is vital.
August 26, 2014 at 11:05 am
these lectures are really helping and understandable for me,a Chinese,and I plan to view all the lectures,love them!especially for teachers’ British accent, that sounds gentle and beautiful~
August 26, 2014 at 11:18 am
I am pleased that the lectures are helping you.
March 17, 2014 at 7:46 pm
Omg am using my note 3 to wtch this vedeo.
March 17, 2014 at 8:13 pm
Exactly what is that supposed to mean?
May 27, 2014 at 11:03 am
I m also using note 3 watching this video lectures.. good work sir johmoffat
October 23, 2013 at 9:22 am
plzzz solve dis question 4 me wit explanition,,,,,,im hvng problem selecting the activity which has same fixed cost plzz sme1 explain……….. An organisation has the following total costs at the following activity levels: Activity level (units)16,000,,,,18000,,,,20000,,,,22,000 total costs ($)135,000,,,,140,000,,,,150,000,,,,170,000 Variable cost per unit is constant within this range of activity but there is a step up of $5,000 in the total fixed costs when the activity exceeds 17,500 units.
What is the total cost at an activity of 20,000 units?
October 23, 2013 at 10:03 am
Have you typed the question correctly, because you have listed the total cost at an activity level of 20,000 in the body of the question?
In general however, look at the difference between the highest and lowest as usual, but if there has been a step up in fixed costs, then 5,000 is due to the step up and the rest of the difference is due to variable costs. Then you can continue as normal – the variable cost per unit is the remaining difference in the total costs divided by the difference in the units.
October 24, 2013 at 9:19 am
sori 20000 z not there wit cost,,,,,,,in the above case if it was e.g activity lvl: 14,000,,,16,000,,,18,000,,22,000,,,,,cost($)120,000,,,,,135,000,,,140,000,,,170,000,,,,,,,hw wuld u select high low there????perhaps their z a concept of fixed cost which shuld b equal in both high n low,,,,,,,i,m jst confuse in dat,,,im confuse in selection of high low in dis kind of questions………plzz explain……
October 24, 2013 at 9:28 am
The highest level of activity is 22,000 and the lowest is 14,000.
The difference in the costs is 170,000 – 120,000 – 50,000, but 5,000 of this is due to the step-up in fixed costs. The rest of the difference is the extra variable cost of the extra 8,000 units.
Then you can carry on as normal.
October 24, 2013 at 3:47 pm
bundle of thx sir…….
November 29, 2013 at 9:01 am
Mr.Johnmoffat. zahidkhan2015 requested for a question to be solved and you did that. Its amazing. You are doing really a great and extra ordinary job. Hope I am able to have a face to face meeting with you.We hope to learn more and more from you. God Bless You Sir.
November 29, 2013 at 9:19 am
daudzai: Thanks for the comment. We are here to answer questions (although the best place to ask them is in the ‘Ask ACCA tutor’ forums – we cannot always read every comment on every lecture because there are too many, but we always answer questions in the Ask ACCA Tutor forums very quickly)
September 7, 2013 at 11:19 am
November 29, 2013 at 2:43 pm
Thank you so much once again Mr. Johnmoffat. I can not stop praising you for what you have doing to the people who want to learn and improve themselves. You are a gift of God for all of us. Though I have not yet formally started my studies but am planning to. I’ll off course resort o ACCA Tutor as you advise that is the right place to ask question and will be quickly answered. I need an advise from your goodself. I want to do FIA (ACCA Diploma). Will it be ok that I buy books and down lecture notes from Opentuition for foundation papers. Read both the books and Opentuition notes, listen to your beautiful and impressive lectures. Will this suffice to go through the examination and pass all the papers or you will advise something otherwise. Thank you once again for your generously extended help. God Bless you.
November 29, 2013 at 3:07 pm
Thank you again for your comments.
What you suggest will be sufficient. The book you do need is the Revision or Exam Kit – these contain lots of questions to practice, and that is essential.
November 29, 2013 at 3:38 pm
Well I believe you don’t need to be thankful to anyone of us learning from you instead we, all, should be thankful to you and your team for what you are giving ‘KNOWLEDGE’. You reply is really really motivating and encouraging. As advised I’ll get not only the Revision or Exam Kit but the book as well. Besides, I seek your permission to take a print out of the lecture notes from the great and respectable site of Opentuition. I work for very long hours and then have to give some time to kids as well. Therefore, I would like to seek one more advise and that is how much time do I need to study daily in terms of hours. In addition to that I have another request and that is can I meet you in person, if possible. Thank you very much once again. God Bless you great Teacher.
September 4, 2013 at 5:03 am
Why are the videos tripping off?
September 4, 2013 at 9:04 am
Slow internet connection at your end
September 1, 2013 at 11:34 am
I need some help about the fixed cost definition. I am using the BPP study text. It says:
“A fixed cost is a cost which tends to be unaffected by increases or decreases in the volume of output” (so far I understand)
“Fixed costs are a period charge, in that they relate to a span of time; as the span increases, so too will the fixed costs. It is important to understand that FIXED COSTS ALWAYS HAVE A VARIABLE ELEMENT, SINCE AN INCREASE OR DECREASE IN PRODUCTION MAY ALSO BRING ABOUT AN INCREASE OR DECREASE IN FIXED COSTS” (then I am lost)
I understand that:
– if we compare a fixed cost with the activity level, it won’t change
– if we compare a fixed cost with time, it will change
I don’t understand what I have put in capital letters. It confuses me. Because I thought that if this happens (in capital letters) it might be a stepped cost then.
September 1, 2013 at 11:59 am
Assuming that you have quoted them correctly then it is wrong!
Fixed costs (by definition) do not vary with the level of production. There can be stepped fixed costs, but they are fixed over a certain range. There can be semi-fixed/variable costs, which are part fixed and part variable.
Which chapter of the BPP Study Text are you quoting this from (because I am surprised that they should write this!!)
September 1, 2013 at 1:19 pm
It is from chapter 4 – Cost behaviour (page 58).
I am relieved to know that it is just a mistake. I was looking for a consistent meaning but I really could not understand.
Thanks a lot!
September 1, 2013 at 7:30 pm
I have looked at page 58 and what is written there is nonsense
November 25, 2013 at 11:03 am
yes, this is not the forst tie I see an error in materials from BPP
August 18, 2013 at 4:55 am
very useful, cost unit, total direct cost= prime cost, total production cost = prime + p. overhead
July 12, 2013 at 4:03 am
Where exactly can i download all this vedio lectures ?
July 12, 2013 at 6:25 am
Lectures cannot be downloaded – it is the only way that we can keep this website free of charge.
May 18, 2013 at 1:29 pm
Q. Labor is assumed to be a variable cost, would it appropriate to be fixed if the salary has no reference to the no. of unit produced?
May 18, 2013 at 3:27 pm
Yes – provided it does not change with the level of production.
August 19, 2013 at 3:56 pm
please provide me with new mock exams as i did not finish answering those quasions in f1 and f3 as the internet was not good
May 7, 2013 at 5:12 pm
this is very beneficial and very easy to learn
March 26, 2013 at 3:09 pm
i have a question and i really need help with it.
A particular cost is fixed in total for a period, what is the effect on cost per unit of a reduction in activity of 50%?
hassaan ansari says
July 4, 2013 at 8:21 am
cost increasd 100 % ? 😛
February 12, 2013 at 2:04 am
Sir, in the last study book of BPP for F-2 there is additional division for direct/indirect costs. For instance direct costs consist of : Direct Material, Direct Labor and 3rd one Direct Expenses. As an example for Direct expenses they show:
The hire of tools or equipment for a particular job
Maintenance costs of tools, fixtures and so on.
It makes things more confusing and it is almost impossible to allocate these costs to cost unit. Could you please, clarify this?
February 12, 2013 at 8:04 am
I am not really sure that I understand what your problem is.
Direct expenses are those expenses that can be allocated or measured directly for a specific job or for a specific cost unit.
If we are costing a specific job, then hire of tools etc. can be measured directly and would be regarded as direct costs.
If we were costing units (which is more likely) then hire of tools etc. can not normally be measured for each individual unit and would be treated as indirect expenses.
February 13, 2013 at 3:14 am
Thank you very much!!
It seems they just didn’t clearly explain that in such situations Specific Job is considered as cost unit. However it was written here that “Direct expenses are charged to the PRODUCT as part of the prime cost”. Is it possible to cosider the word PRODUCT as specific job?
February 13, 2013 at 7:53 am
Usually we are costing individual units and in that case direct expenses are those that can be measured for each unit (for example, royalties payable per unit).
In some situations you can regard the product as being a specific job, as you write.
It seems that the text book is a bit confusing
February 13, 2013 at 11:43 pm
Thank you for reply!
Yes, and it seems i will switch to textbooks of Opentuition
January 26, 2013 at 8:40 am
Two budgets are given below:
Output(units) 1,000 2,000
Budgeted cost 2,500 3.500
The total fixed costs estimated for the 2,000 units budget are 20% higher tha the total fixed costs for the 1.000 units budget.
What is the budgeted variable cost/unit of output?
January 26, 2013 at 1:37 pm
You have posted the same question everywhere
The answer is $0.625, use algebra.
February 19, 2013 at 1:54 pm
How did you work this question. Please show working. Thank you!
January 20, 2013 at 8:20 pm
i am not able to see the video of this chapter, are there any?
January 20, 2013 at 11:11 pm
Yes there is a video on this page. try another browser. like google chrome
arish imam says
December 9, 2012 at 4:09 pm
December 7, 2012 at 3:36 pm
I am in South Africa and I struggling to view the videos. what can i do or what can I check for?
December 7, 2012 at 11:26 pm
try another browser, like google chrome
November 24, 2012 at 11:40 am
Its great lectures, are theses videos downloadable? pls could somebody help and explain.
November 24, 2012 at 12:57 pm
No, you can only watch lectures on line
October 29, 2012 at 4:09 pm
great leacture thank u sir
July 20, 2012 at 9:47 am
it’s easy to understand, thank you very much
July 6, 2012 at 7:30 pm
This is sweet. Opentuition makes it so interesting.
June 21, 2012 at 5:01 pm
Great lecture. Thanks for open tuition, amazing help in understanding.
M. Osman Kamran says
June 19, 2012 at 8:15 am
thanks from opentuition.com, it is really usefule and easy to learn from notes and lecures.
May 18, 2012 at 7:35 pm
Please,can anyone tell me which one is the lecture for Regression analysis??????????? Thanks
June 3, 2012 at 11:34 am
@qiuxiabowry, If I am not late to reply for your query ,Regression Analysis Leture is found in ACCA F2 Chapter 17 Semi- Variable Costs(Business Mathematics) .Very interesting lecture by John Moffat. Best of Luck
May 7, 2012 at 10:00 pm
thank you make it seem so simple
April 27, 2012 at 2:51 pm
Very difficul to play these vidoos.
May 7, 2012 at 12:50 am
@ahmeem9019, its fairly simple to play the videos. try using a different browser from the one you are using and try.
April 20, 2012 at 5:16 pm
Great lectures and lecturer – easy to understand the whole meaning. All is left – to remember)). I also like sense of lecturer’s humour!!!!!
April 12, 2012 at 11:30 am
thx it is really useful i was unable to understand in class but learn it here….
April 11, 2012 at 9:13 am
I NEED BOOKS FOR F2 + F3
DOES ANYONE HAVE BOOKS OR KNOW WEBSITE FREE ???
April 9, 2012 at 3:27 pm
Nice and simple, thanks a lot for the help.
March 27, 2012 at 8:06 am
what will be the cost unit for a car manufacturer?
November 11, 2012 at 11:25 pm
@devikaramlugun, As it was said in the lecture: an appropriate cost unit for a car manufacturer is one car.
BERNARD K says
March 16, 2012 at 9:40 am
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January 25, 2012 at 5:53 pm
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January 10, 2012 at 3:08 am
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January 2, 2012 at 5:32 pm
December 27, 2011 at 6:15 pm
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