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July 24, 2014 at 11:09 am
Sir, i have a question. a company uses flexed budgets. The fixed budget last month was based on 100% activity level and showed material costs of $200k. Last months actual material cost were $120k and showed a favourable variance of $5000 when compared with the flexed budget. What was the actual level of activity last month as a %?
(answer is 62.5%)
p.s i got wrong for this when doing the revision mock exam.
John Moffat says
July 24, 2014 at 12:05 pm
If actual costs had a favourable variance then the standard cost for the actual production would be 125,000. Since the original budget was 200,000, the activity level must be 125/200 = 62.5%
March 23, 2014 at 8:57 pm
HI sir there one problem in Flexed budget on Variable overhead side
Variable OH Per unit = $12,500 / 10,000 Units = $2 per unit
if we multiply it by actual level of activity we will get $24,000 for variable overhead in flexed budget
March 23, 2014 at 9:56 pm
12500 / 10000 does not equal $2 !!!
I think the problem is on your side
November 10, 2013 at 1:03 am
thank u very much once again john
November 8, 2013 at 4:22 am
this was very straightforward…… thank you
October 14, 2013 at 6:21 pm
A Co. uses Flexed Budgets:The fixed budget last month was baase on 100% Activity level and show material cost of
$200,000. Last month’s actual material cost were compared with the flexed budget and show the follow:
material Actual 120,000 Variance 5000 favourable
What was the actual activity last month as a percentage
October 14, 2013 at 6:24 pm
Because the variance was 5000 favourable, it means that the flexed budget will show materials of 125,000.
The original budget at 200,000, and so the actual activity must have been 125,000/200,000 x 100%
May 21, 2013 at 3:41 pm
Please how did you get the contribution of 12500?
May 12, 2013 at 6:54 am
i feel sorry for you and you might send your students to TIME OUT for not remembering the term CONTRIBUTION………..even i named the term when you asked…………
May 12, 2013 at 10:03 am
I always have to remind people what contribution is
The term is used in later exams also, and always many people forget what it is!
February 21, 2013 at 1:41 am
I have a question.
QT co. Manufactures a single product and an extract from their flexed budget for production costs is as follows.
Direct material. 2400. 2700
Labour. 2120. 2160
Production o/h. 4060. 4080
What would the total production cost allowance be in a budget flexed at the 83% level of activity?
I keep on getting 7121.4 which is wrong. Any help plz???????
May 12, 2013 at 10:10 am
You need to us high/low because some of the costs are variable and some of the costs are fixed.
The total cost for 80% is 2400 + 2120 + 4060 = 8580
The total cost for 90% is 2700 + 2160 + 4080 = 8940
So, the variable cost for 10% is 8940 – 8580 = 360.
So the variable cost for 3% (83% – 80%) is 3/10 x 360 = 108
So the total cost for 83% is 8580 (the cost for 80%) + 108 (the extra variable cost for the extra 3%) = 8688.
(there is obviously no extra fixed cost for the extra 3%)
December 19, 2012 at 5:54 pm
December 9, 2012 at 4:30 am
Very well explained. Thanks opentuition.com
December 6, 2012 at 3:40 pm
Thanks a million.
November 29, 2012 at 5:15 am
October 11, 2012 at 4:23 pm
feels like a day at the spa…..sipping on some coconut water…………….REJUVENATING!!!!!thx OT!!
September 24, 2012 at 2:21 pm
This is very good. i enjoyed it. God bless this teacher.
July 13, 2012 at 7:25 pm
cannot find video for example 2b, please assist
June 23, 2012 at 2:52 am
thanks, great job!
June 4, 2012 at 1:17 pm
March 26, 2012 at 9:36 pm
cleared up a whole lot of things. very good.
November 17, 2011 at 4:04 pm
I cannot see this lecture. Is this meant to be audio.
January 4, 2012 at 9:18 pm
February 16, 2011 at 6:14 pm
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