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this was a good lecture…..i wonder if this is enough for one to pass the exam. can i rely only on this lecture and course notes with out reading the study and revision kit to pass my exams?
There is enough knowledge in the lectures and course notes to be able to pass the exam well – best is to use the study text just as a reference book for any areas you are not so sure about.
However it is vital to practice as many questions as possible to get used to the wording, the level of difficulty, and the time pressure. At the very least it means working through all the past questions. Best is to use a revision/exam kit because they have more questions.
Can somebody clarifies to me please the explanation he mentioned when he refereed the advantage number 2 to the question. i honestly couldn’t get the relation ship between the setup and labours in reducing the cost. I was lost:(
In the example used, we are setting up the machines a total of 25 times.
The reason we need to set up the machines so many times is because we are producing the units in batches. (So for example, we are producing 20,000 units of product A and we are setting-up the machines 10 times, which must mean that each time we produce product A we are producing 20,000 / 10 = 2,000 units each time)
If we could change, and decide to produce (say) 4,000 units each time, then we would only need to set-up the machines 20000/4000 = 5 times.
If as a result we could reduce the number of set-ups needed, then maybe we could operate with fewer workers (we need people to do the setting-up). If we can operate with fewer workers setting up then we could save money.
Activity based costing makes us find out what is causing the costs (i.e. why are we spending $90,000 on set-up costs). Having found out that it is because of the number of set-ups we are having we can then consider ways of reducing the number of set-ups (by making bigger batches each time) and then hopefully save money.
Could someone please explain the calculations to arrive at the table below found on paper F5 pilot paper answer sheet question one part C
Products D and C are relatively minor volume products but still require a fair amount of administrative time by the production
department; ie they involve a fair amount of `hassle`. This is explained by the following table of `activities per 1,000 units
Set-ups Materials Inspections movements
D 100 16 200
C 92 17 144
P 69 12 96
This table highlights the problem.
– Product P has fewer set-ups, material movements and inspections per 1,000 units than or C
– As a consequence product P’s overhead cost per unit for these three elements has fallen
– The machining overhead cost per unit for P is still two or three times greater than for products D or C, but because this
overhead only accounts for 20% of the total overhead this has a small effect on total cost.
– The overall result is P’s fall in production overhead cost per unit and the rise in those figures for D and C
Please Sir I need your help……
Thank you for wonderful lecture…. I try to solve ABC examples. I found in this year pilot paper from ACCA web site, Question-1 for ABC costing and that question is for 25 marks. Only four question in pilot paper. I have idea, in exam 5 question and each for 20 marks. Please Sir can you tell me is there any changes in exam format? or This changes for pilot paper only.
There used to be 4 x 25 mark questions, but this changed about 5 years ago.
Now there are 5 x 20 mark questions.
Where is the like button for lecture?
Sir, I am not sure, maybe confusing something, but i think I have also seen overheads, which it is difficult to find driver for, are considered in mark-up rather absorbing with traditional method. I suppose it is called modern (advance) costing techniques. Please, correct me if i am wrong.
What usually happens is that ABC is used where possible, but that other overheads (for which it is difficult to find a driver for) are absorbed on a traditional basis (e.g. on a labour hour or machine hour basis).
Thank you for answer. One more question:
I suppose you use here example of only production overheads. As i know ABC system involves non-manufacturing cost as well which is not the case in traditional costing. What would be the situation if there was non-production overheads?
ABC as it was developed does not involve non-manufacturing costs – it is concerned with getting the cost of production.
There may be circumstances where you could use an ABC approach to some non-manufacturing costs, but this was not the original purpose (and is not relevant for F5).
Thank you for answer. the chapter by Maria Major edited by Hopper, Northcott, Scapens in ‘Issues in Management Accounting’ (2007) says (page 161):
In traditional costing systems only manufacturing are normally allocated to cost objects, whereas manufacturing and non-manufacturing overheads are assigned in ABC systems (Innes and Mitchell, 1993, 1998). The inclusion of non-production overheads in ABC is particularly useful for analyzing product profitability by distribution channel, customer or market segment.
Is it that case you wrote?
Priceless , many thanks
wow wow wow!!!
YOU ARE SIMPLY THE BEST
Great work !! The way you explain things is amazing.
Thank you very much for helping us.
Lecture stops midway! Why???
press play again it should pick up where it left off,..
i tried doing that! It did not help!
Thanks to Muffat, I scored 90% in F2 and 98% in F3!! God Bless!!
Congratulations (but its Moffat, not Muffat )
i really enjoyed the lectures
Thanks to open tuition team
i really enjoyed the lecture
Thanks to open tuition team
hi dear provider open tuition
you make easy to study the courses and save my time thank u so much. GOOD HELPS YOU ALL OPEN TUITION STAFFS.
Thanks to open tuition team……
i really enjoyed the lecture but i ll lyk to ask a question,
can they ask in the examination to use another basis aside labour hours to calculate the cost per unit as its been asked in example 1a
Yes – they can ask you to use any basis.
Some of the lecturers are sooooo slow..it makes it nearly inefficient to watch videos as primary learning tool.
you mean, videos are slow loading? breaking in the middle? you may need faster internet connection..
Can you help me with this one. I’m a bit confused.
The cost driver for quality inspection is likely to be batch size. True or False?
i could see more cost drivers then size of the batch, but one of the cost drivers is batch size.
@ayeshahabib, It depends on the information in the question. The most likely cost driver is the number of inspections!
@johnmoffat, so the answer to this is basically true. right?
but in the BPP Study text it says False :S I am too much confused
@ayeshahabib, As I said, it depends on the information in the question! Without the question I cannot say any more.
I can see the lecturer speaking but i can’t hear him. Moreover,each time i click on the screen to make him look bigger, its always going on pause mode. Helppp plssss
you must have pressed ‘mute’ button on the player.
if it pauses for you in fullscreen – then I’m afraid, all I can say is, don’t watch it full screen,
Good one….. Can i pass if i use open tuition only or i still need to get the BTT material
@dziwandi, I don’t know what BTT is
The OpenTuition notes contain enough to pass the exam, but the more you study the better. In particular you must practice as many questions as you can. Best is to buy a Revision/Exam kit. At the very least you must practice all the old ACCA exam questions that you can download from the ACCA website.
Awesome! God bless opentuition!!!
faaaaaaaaaaabulas , may u live long and there won’t b any tens in ur life…. u dafinately gona go to heavennnnnnnn. thanx a lot i love u alot as i love my teacherssssss.
thank you open tution.
thank you .because this is helpfull
I enjoyed the lecture. Thank you John
This is fantastic, and is more than enough for ABC. Good luck to us all
Wow, that was good!
excellent lecture,understood ABC. thnakyou
Allah bless you and give you every happiness in your life
You are doing a great charity
osam! so helpful
great work, lectures are really helpful. Thank you Open Tuition!
Very good lecture extremely helpful! thank you.
it`s great lecture! Hope I would pass this time Thank you!
@milania, Inshallah u will.. May God give u success
where r u from?
very good,It gives me a clearer understanding of ABC.Thank you.
very good,Its give me a clear understanding.Thank you.
This is very helpful. Thanks a lot
I can’t access the said lecture
Hope i had someone who could explain me things this beautifully ….
This is awesome and extremely helpful. Mr. Moffat ROCKS!!! I enjoy listening to and now watching him. He makes it look so simple. Thats OT!
very good lecturer
This is so lovely i like the videos very much. GOD BLESS YOU
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