1. Profile photo of Saba says

    Dear John

    Could you please help me

    I have question regarding ABC calculations

    Total overhead what we calculated ( 78040+94690+17268) it should be 190K am i right ? but its not
    Its rounding issue?

  2. avatar says

    I’m really gratefull for all the work you did to provide us the lecture. And always wonder don’t you have some impolites from the side of ACCA that you give us the knowledge for free?

    Many many thanks!

  3. avatar says

    i want to ask why did we multiply machine hrs with number of outputs/units while calculating machine hrs in absorption costing and why did we not multiply machine hrs with lab our rate per hr that is 5 while calculating machine hrs under abc costing?

    • Profile photo of John Moffat says

      It is because in order to apportion the overhead between the products we need to know how many machine hours are worked for each product.

      The hours on machines will not necessarily be the same as the labour hours (and they are certainly not the same in this question).

  4. avatar says

    Hello Sir,
    I have a question.

    Example of a question:
    Briefly explain the implementation problems often experienced when ABC is first introduced. (4marks)

    The question says briefly explain. What will happen if I answer very brief for example

    – Lack of understanding by manager
    – Difficult to identify cost driver


    Can I still gain marks without further explanation for every answer?


  5. avatar says

    First of all, thank you for providing such a great learning ressource to study the ACCA!

    Quick query:

    We’ve figured out the machine cost per hour at 0.585. In terms of the overheads, why are we not multiplying this by 2 to get a cost of 1.17 per unit (since it takes 2 hours to make a unit), and using 1.17 in our overheads cost card?

  6. avatar says

    Hi i want to know what will be the cost drivers for : Procurement cost, Machine running cost and Machine set up cost??

    if cost drivers given are : No.of production runs, No.of purchase orders and No. of deliveries

    as far as i know No.of runs will be for machine running cost but what about procurement cost and machine setup cost. What are these two related to? :(

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