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F2 Revision Lectures
June 7, 2015 at 10:30 pm
Can’t find the question you are solving.i have downloaded the revision notes.
June 7, 2015 at 11:00 pm
Sorry.i have seen the lectures.
May 5, 2015 at 1:43 pm
Please assist , how to calculate the “Closing Stock” using marginal Costing/Variable Costing and Absorption costing
John Moffat says
May 5, 2015 at 3:30 pm
Have you watched our free lectures?
Closing inventory in marginal costing is valued at the total variable production cost. In absorption cost it is valued at the total production cost including fixed overheads of production.
(I trust you have watched the full F2 lectures where we go through the syllabus in detail. These revision lectures are just meant to be quick revision of the main points.)
February 25, 2015 at 3:03 pm
very helpful indeed
July 24, 2014 at 12:05 pm
This too :
A company uses standard absorption costing. Its fixed overhead absorption rate is $8 per machine hour and each unit of production should take 3 machine hours. Last year there was an opening inventory of finished goods of 4000 units. They produced 30,000 units and sold 25,000 units. The actual profit last year was $526K.
What profit would have been earned under a standard marginal costing system?
(the answer is $406K)
my workings are : 4K + 30K – 25K = 9K x $8 = $27,000. $526,000 – $27,000 = $499K. I do not know where did i go wrong.
July 24, 2014 at 7:50 pm
Please ask questions like this in the F2 Ask the Tutor Forum – not as comments on lectures.
The only difference between marginal and absorption costing profits is the fixed overheads in opening and closing inventory.
Here, the inventory increases by 5000 units. The fixed overheads per unit are 3 x $8 = $24.
So the profits will be different by 5000 x $24 = $120,000.
Because inventory is increasing, absorption profit will be higher than marginal profit, so the marginal profit is 526,000 – 120,000 = $406,000
July 24, 2014 at 8:48 pm
So here, we totally don’t look at opening inventory of finished goods 4000 units?
July 24, 2014 at 8:56 pm
You are only interested in the change in the inventory.
July 24, 2014 at 11:48 am
Sir, how do you work this out?
A company uses standard absorption costing. Its fixed overhead absorption rate is $8 per machine hour and each unit of production should take 3 machine hours. Last year there was an opening inventory of finished goods of 4000 units. They produced 30,000 units and sold 25,000 units. 90,000 machine hours were used for production, and the total fixed overheads were $700,000. What was the amount of the over or under absorption of fixed overheads?
(answer is 20,000 over-absorbed)
July 24, 2014 at 7:46 pm
As you will know from the lectures, the over or under absorption is the difference between the actual fixed overheads and the amount absorbed (i,e, actual hours x standard cost per hour).
The amount absorbed is 90,000 hours x $8 per hour = $720,000.
The actual overheads were $700,000.
So the amount over-absorbed is $20,000.
July 24, 2014 at 8:46 pm
So there’s nothing gotta to do with the opening inventory, production and closing?
July 24, 2014 at 8:55 pm
Yes it has. It is the change in inventory that is relevant.
If they produce more than they sell, the inventory will increase. If they sell more than the produce, then inventory will decrease.
May 5, 2014 at 11:21 am
Thank you soo much its helping a lot and this is the best source i have found for my revision thank you 🙂
August 10, 2013 at 4:20 am
very helpful , been having problems understanding the difference between marginal costing and absorption costing
May 17, 2013 at 1:27 am
Excellent lectures I’m unable to download the revision notes even after login in. Please assist. Thank you
April 7, 2013 at 5:00 pm
Hlw guys..um new here..if there r any lecture for fa1/ma1?
April 7, 2013 at 5:34 pm
hi, i am afraid, at the moment there are no lectures for these exams.. 🙁
April 7, 2013 at 12:00 pm
why i can not find the example in the revision notes
February 14, 2013 at 3:58 pm
how can i download notes of diferent topics
November 28, 2012 at 5:51 pm
its very helpful,thanks alot.
November 19, 2012 at 8:31 am
sir can you please tell me that when inventory level decreases marginal gives a higher profit but will the valuation of inventory also give a higher value then absorption costing?
November 28, 2012 at 7:19 pm
@faaezam, The value of inventory is lower with marginal costing than with absorption costing (because the absorption cost includes fixed overheads whereas the marginal cost does not)
November 15, 2012 at 12:57 pm
where can i find the question that you are doing in this particular lecture?
November 21, 2012 at 2:35 pm
@Sindy, download the revision lecture note
August 27, 2012 at 12:35 pm
how can i download these lect ? somebody help
August 27, 2012 at 1:29 pm
@mnyahwe, The lectures are not available for downloading – it is the only way that we can keep this site going.
June 17, 2012 at 5:54 pm
These revision are much more helpful than attending classes… No disturbance, i can rewind and replay in case i didn’t understand.. Zat’s perfect… Very clear explanation, covering details of all chapters!!
Thanks a lot!!
May 2, 2012 at 7:16 am
January 15, 2012 at 12:26 pm
Dear,Sir/Madam thanks a lot for F2 Revision notes.
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