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June 19, 2016 at 10:34 pm
Thank q sir
John Moffat says
June 20, 2016 at 3:04 pm
You are welcome 🙂
June 17, 2016 at 11:54 am
How to calculate machine hour instead of labour hour as mention in lecture example
June 17, 2016 at 4:55 pm
But I show the workings for the total machine hours (94,000) in my lecture!
June 14, 2016 at 7:17 pm
dear sir…. We should write any notes of the outcome in the exam or only solving the problem is fine.
June 15, 2016 at 5:22 am
It depends what the question asks. They will likely ask you to discuss the outcome.
May 10, 2016 at 12:46 pm
Dear Mr, John Moffatt, I would like to seize this medium to appreciate the way you handle this topic. It helps in increasing my confidence in writing the examination, soon. Thank you.
May 10, 2016 at 4:59 pm
Thank you very much for the comment 🙂
March 13, 2016 at 8:53 am
When I approached the question, I laid it out as you had, except that I used just my trusted blue pen. So, even though our layout is the same, it becomes difficult to read what part is workings and looks messy.
Are we allowed to use different colours when presenting our answers? I’m assuming red is out the question as markers generally mark in red pen, but may we use, say, blue pen for our answer and black for workings so that it’s easier to read?
March 13, 2016 at 3:13 pm
You must use black pen for everything – it is the ACCA rule (because your answers are scanned for sending to the markers).
March 14, 2016 at 8:25 pm
Thank you for clarifying.
March 15, 2016 at 6:38 am
April 8, 2016 at 2:19 pm
Good to know…. thanks John
April 8, 2016 at 5:47 pm
No problem 🙂
February 14, 2016 at 8:29 am
hi sir.. what about if there’s no material and labour provided in the question? how to do the calculation
February 14, 2016 at 12:09 pm
If you are not told then you cannot calculate the full cost!!!
In that case you would only be required to calculate the overheads. The question will always give enough information to calculate whatever is required.
February 3, 2016 at 2:27 am
Really good lecture, thank you!
February 3, 2016 at 7:42 am
Thank you 🙂
M DURGA PRASAD says
January 30, 2016 at 8:58 pm
sir, it was fantastic lecture…..n sir I have a little doubt regarding presenting it on t paper…sir do I have to specify n give a note on the product tat by doing so an so we get profit/loss…n then we provide some remidies to solve t problem…as u have said …is tat wil be better?
January 31, 2016 at 9:10 am
The question will make it clear as to what is required.
January 21, 2016 at 9:34 pm
Hi I would like to ask one thing in ABC method,
What if we are provided with the ‘revenue’ and ‘cost of products sold’ in items, how we have to tackle such situations?
Items Soft Drinks Fresh Produce Packaged food
Revenues 425,800 756,250 443,280
Cost of product sold 262,500 467,500 270,000
Cost of empty bottles returned 6,800 0 0
No. of purchase orders placed 315 285 210
No. of deliveries received 420 570 525
Hours of shelf stocking time 250 1,425 1,050
Number of product sold 63,000 285,000 105,000
Activity Total Cost Cost-Allocation Basis
Bottle returns 6,800 Direct tracing to soft-drink line
Ordering 81,000 810 Purchases orders
Delivery 106,050 1,515 Deliveries
Shelf-stocking 55,875 2725 hours of shelf stocking time
Customer 135,900 453,000 items sold
How we will calculate costing on traditional basis and ABC basis and also we have to calculate operating income and the operating income as percentage of revenues for each product line?
January 21, 2016 at 9:36 pm
I apologise as the space were deleted but please explain the concept of the revenues cost of products sold.
January 22, 2016 at 9:05 am
You must ask questions like this in the Ask the Tutor Forum, and not as a comment on a lecture.
January 11, 2016 at 10:48 am
After 6:30 minutes later this lecture is stopped and show ended. please do the needful.
January 11, 2016 at 1:39 pm
No it doesn’t stop – the lecture is working fine.
The problem must be at your end, so please go to the support page – the link is above.
January 13, 2016 at 2:08 pm
HAPPY new year to you and evryone else on the forum.are you saying that even in an exam, this kind of question will have to be answered using both methods or just one?
January 13, 2016 at 6:02 pm
I do not say that at all – you can do it either way.
October 26, 2015 at 7:52 pm
Thanks a lot for this! Helped me a lot!!
October 27, 2015 at 9:27 am
I am pleased it helped 🙂
September 23, 2015 at 5:20 pm
Firstly, thank you for your lecture, it’s really help me so much. My English is not good so maybe I missed some key words in your lesson, therefore some things make me confusing, please explain to me when you have time:
1. If I replace the cost drivers: maching cost hours per unit by the numbers of machine was used to make each product, and the receiving material by handling material, the calculate for these cost drivers will be change or not?
2. For each examination, there is only 1 cost driver will be calculated with different way with the others?
September 23, 2015 at 5:35 pm
Thank you for your comment 🙂
1. If you use the numbers of machines, then the amounts will change. Here you have to use the total hours as the cost driver.
2. Exam questions usually have about 4 different overheads but they tell you which cost driver to use for each of them.
September 22, 2015 at 3:09 pm
The sound is not O.K after 15 minutes although I tried in Google Chrome browser. Please look at the matter for further improvement.
September 22, 2015 at 3:12 pm
The sound is fine throughout. You might need to turn the volume up a little after 15 minutes – it is because it was recorded live.
September 20, 2015 at 12:33 pm
Hi how do I download your videos please
September 20, 2015 at 12:48 pm
Our videos can only be watched online. It is the only way that we can keep this website free of charge.
August 17, 2015 at 5:40 pm
Can you tell me why in order to get the overhead cost you divide it my the total hours without calculating the total machine hours
August 17, 2015 at 5:45 pm
But I did calculate the total machine hours (and showed the workings for calculating it also).
August 6, 2015 at 4:06 pm
there no sound sir,
August 6, 2015 at 4:33 pm
Visit support page for help. >> try another browser.. like google chrome.
sound is OK
August 1, 2015 at 1:27 pm
Sir, How come no sounds from your lecture video?
August 1, 2015 at 1:43 pm
The sound is working fine! Check the sound settings on your computer.
July 10, 2015 at 3:20 pm
Would it be okay if I were to round up the figure of machining (overhead) from 0.585 to 0.59? Because when I did that, my answers were quite different compared to what you wrote.
July 10, 2015 at 6:45 pm
No – you should not round when splitting the overheads between the products.
July 12, 2015 at 5:11 pm
Hi Sir, I have the same question of “Erica” asked even after i read your answer. so are we not splitting the other overheads namely receiving dispatching and set up costs ? Is it the reason that we should not round off since we use machine hours?
July 12, 2015 at 5:14 pm
There is no firm rule. A bit of rounding does not matter, but you don’t want too much.
(Remember (as I say in the lecture) that it is the overhead per unit ultimately that matters and so because you divide the total by the number of units at the end, a bit of rounding in the totals will not affect the final overhead per unit)
December 22, 2015 at 12:06 am
I enjoyed the first 2 lectures and am looking forward to the rest of the syllabus. I too have concerns about rounding; you mentioned in the lecture that it does not matter (if we round) but if we round to the nearest cent for machine hours (0.59 instead of 0.585) we get a different overall answer. In the exam we do not have time to check back so would it be safer to avoid rounding from the outset?
December 22, 2015 at 7:05 am
It is better to have too little rounding than too much.
However, questions like this would be in section B of the exam, and in section B it is the workings that get the marks – not the final answer. Differences due to rounding do not lose marks.
July 9, 2015 at 4:01 am
The lecture was great easy and understandable. I feel am in the classroom from my tab. Thank you so much and God bless you.
June 2, 2015 at 11:34 pm
So so so sorry if this is in the wrong place but I was so so ill during the f5 exam and made the silliest mistake ever. Instead of multiplying by total units i did CPU/total cmost driver units. I then divided that by 37000 ( total units) and multiplied that number by the cost the cost Driver units. how many marks should I lose?
June 3, 2015 at 7:17 am
In future please ask this sort of question in the Ask the Tutor Forum – not as a comment on a lecture.
I really can’t say how many marks you will lose – partly because it is not me who will be marking it, and partly because obviously I can’t see exactly what you wrote in your answer.
You should still get some marks so don’t worry about it too much.
May 6, 2015 at 12:51 pm
Your lectures was just fantastic and clear to understand.
Best Regards Sir.
olufunke oyaleye says
May 4, 2015 at 9:16 pm
I really do appreciate your teachings. This has given me more insight on ABC.
Thank you so much.
May 2, 2015 at 2:53 pm
You teach so well, makes one actually love it all. Your tutoring isn’t mechanical at all, its actually kinda fun.
I was behind on my preparations because I got my text materials late. But with this, and how you teach,…. thank you so so much.
May 2, 2015 at 2:48 pm
I can’t thank you enough.
April 19, 2015 at 10:24 am
really helpful. I’ve just started to study F5 by myself but feel quite hard. Your videos make things easier. Thank you!
April 16, 2015 at 5:23 pm
I’ve spent my time getting a degree in accounting and finance. You teach it better than any of my tutors and some of them were pretty darn good
April 17, 2015 at 10:09 am
March 24, 2015 at 10:10 pm
Hi John, I agree with other students, I go to class but found your lecture is clear and easy to understand, your humour is a great plus. Thank you for setting up this free lecture. You are helping millions of us students.
March 17, 2015 at 5:43 pm
I just joined this online Open Tuition.com and overall I think it is a great start for the learner and it helps a lot on our study to those student like me to make preparation for the ACCA.
Thanks a lot lecture;John Moffat for the Knowledges.
March 17, 2015 at 5:51 pm
Thank you for your comments 🙂
March 9, 2015 at 11:40 pm
Sir ,you described about the marker’s approach for marking ,what about marking approach in theoretical questions..your opinion is greatly appreciated.
Usually each valid point gets one mark (unless the question makes it clear otherwise – for example if you are specifically asked for 3 points).
Best is to look at a few of the examiners marking guides – they are always at the very end of the examiners answers (which you can download from the ACCA website). It is listed there how the marks are actually allocated.
February 26, 2015 at 1:22 pm
Thanks alot for the lectures,I was thought in class, but I actually did understand all on abc costing after watching your lectures. Thanks
February 26, 2015 at 1:21 pm
Thanks alot for the lectures,I was thought in class, but I actually did understand all on abt costing after watching your lectures. Thanks
February 16, 2015 at 8:58 am
sir can you name some examples for PRODUCTION OVERHEADS AND NON PRODUCTION OVERHAEDS
February 16, 2015 at 9:23 am
Production overheads are those involved in manufacturing e.g. rent of the factory; depreciation of machines.
Non-production overheads are those involved in the administration and selling and distribution e.g. wages of office staff; depreciation of delivery vans.
February 16, 2015 at 6:39 am
sir i am not able to watch the video
February 16, 2015 at 9:21 am
The problem must be at your end. You should go to the support page (the link is above) and you should find a solution there.
February 10, 2015 at 7:06 pm
WOW, great lecture and i love the sense of humour.
November 26, 2014 at 8:36 pm
Sir I used this method shown above in ABC in the paper 2june 2014 Q1 (b)
But the answer is wrong. Why is it so???
November 27, 2014 at 5:56 am
The examiner does it exactly the same way, so I am sorry but I do not know where you made your mistake.
November 27, 2014 at 1:46 pm
So i can used your method?
November 27, 2014 at 2:48 pm
Yes (and so has the examiner).
November 27, 2014 at 2:49 pm
Yes (and so has the examiner) – there is only one correct final answer.
November 26, 2014 at 7:35 am
I have problem on absorption costing in the second stage how to allocate the direct labor while the question is given on direct labor (hours) and Machine usage (hours). The calculation part.
November 27, 2014 at 5:57 am
I don’t know what you mean. Direct labour is charged directly to the units. It is only the machine-related overheads that are charged on the basis of machine hours.
October 11, 2014 at 12:50 pm
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?
October 11, 2014 at 12:58 pm
The fact they do not add up to 190K is due to rounding (and I say that in the lecture).
However it is irrelevant because when you divide by the units to get the overheads per unit, we only do it to two decimal places and so the earlier rounding makes no difference at all.
October 11, 2014 at 6:58 pm
Thank you very much
August 18, 2014 at 11:49 am
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!
August 18, 2014 at 12:13 pm
Thank you for your comment. It is not a problem for the ACCA that we provide the service free 🙂
August 11, 2014 at 4:34 pm
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?
August 12, 2014 at 6:36 pm
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).
August 11, 2014 at 1:36 pm
April 28, 2014 at 5:18 am
This lecture was really an eye opener. looking forward to the others
April 8, 2014 at 3:28 pm
sir great lec..
April 9, 2014 at 6:25 am
April 4, 2014 at 8:29 am
Sir , you made ABC easy for me
January 21, 2014 at 12:16 pm
nice lecture,just made ABC look like reading the alphabets ABC,literally speaking.
November 28, 2013 at 11:32 pm
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?
November 29, 2013 at 8:05 am
Always try to make each point into a sentence, but when it is only 4 marks then certainly you will not be expected to write mush for each point.
(Appreciate that the examiners answers always have more than is expected from you, because they know that people learn from their answers.)
November 29, 2013 at 5:05 pm
November 26, 2013 at 6:56 pm
First of all, thank you for providing such a great learning ressource to study the ACCA!
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?
November 26, 2013 at 7:05 pm
Never mind, I just calculated the cost per unit at each stage, rather than total overheads per stage. End result is the same, sorry!
November 26, 2013 at 7:27 pm
No problem – glad you sorted it 🙂
October 29, 2013 at 10:32 am
is it possible to download the f5 lectures? because i’ m constantly failing, please help, anyone.
October 29, 2013 at 11:13 am
Lectures are not downloadable – they can only be watched online.
It is the only way that we can keep this site free of charge.
October 24, 2013 at 8:07 am
Hello good people of open tuition, please i have being trying to watch this video lectures and it not playing now, pls when will be site be available. Thanks and God bless
October 24, 2013 at 8:19 am
There is a note at the top of the page explaining that the video streaming is temporarily offline.
The engineers are working on it and it should be back soon.
October 24, 2013 at 8:39 am
Thank u sir. You are always very helpful and thank the entire team for the good work. I leveraged on d site for my lectures ans so far,it has be great to His glory. Thank u all. Cheers!
October 18, 2013 at 3:03 am
Phew! These lectures make them look a whole lot easier. Wonder why study texts complicate simple matters. Success is mine.
October 11, 2013 at 10:57 pm
can someone help me with these videos? i am finding it difficult to download.
October 11, 2013 at 11:05 pm
The videos cannot be downloaded – they can only be watched online.
Only the course notes can be downloaded.
It is the only way that we can keep this website free of charge.
September 28, 2013 at 6:07 pm
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? 🙁
September 28, 2013 at 10:23 pm
Procurement is buying, so for this cost it could be number of purchase orders.
For set up cost it would be number of production runs (because they have to set up the machines every time they have a production run)
For machine running costs the most sensible would be machine hours (not number of runs)
September 29, 2013 at 12:34 am
Thanks alot! all doubts cleared ^_^
September 7, 2013 at 6:27 am
sir download is not avalible
September 7, 2013 at 9:52 am
Lectures are not downloadable – only the Course Notes can be downloaded.
August 14, 2013 at 1:10 pm
Good explanation. Better understanding and enable me to be more familar with the management accounting, restoring my confidence on it. Thank you so much!
namuli kasifa says
August 5, 2013 at 8:51 pm
All i need is to pass thank you so much for the great work
June 23, 2013 at 10:22 am
Great great great but lecture but need a sequence b/w lecture I and lecture 2. Allah bless you.
May 11, 2013 at 4:33 am
Well done Lecturer, good source especially for people like me who find it difficult to get Tuition providers nearby.
May 11, 2013 at 10:01 pm
i cant view the lecture, can somebody assist me. the site keep showing 404
May 11, 2013 at 10:58 pm
You need flash player
Are you using android?
April 12, 2013 at 7:03 pm
greeat lecture, God bless.
March 29, 2013 at 6:23 pm
Thank You… Great lecture…..
March 21, 2013 at 1:18 pm
Thank you my lecturer….Hopefully I will pass this paper in June.
March 21, 2013 at 6:17 pm
Thank you. I hope you will pass also 🙂
Usama Shafiq says
March 11, 2013 at 9:24 pm
March 4, 2013 at 4:35 pm
Thanks, very helpful & great service.
keep it up
December 24, 2012 at 12:13 am
very helpful, thanksssssssssssssssss!
November 23, 2012 at 4:13 am
Your teaching is fantastic,pls am not clear on the ABC on machine hour. What criterial is used in getting 2 each used for the cost driver instead of the 2,12 and 2 that was given as the
October 23, 2012 at 1:00 pm
i got much more things in your lecture which i did not get in class, thanks a lot, so much happy with your lecture.
October 21, 2012 at 3:06 pm
October 1, 2012 at 1:31 pm
Thanks a lot its helpful 🙂
August 23, 2012 at 4:28 pm
please in an exams setting can I show all my workings?
October 1, 2012 at 3:31 pm
@isejonas, Yes – you should show your workings in the exam because you will get marks if you are trying to do it the right way, even if you make a mistake.
July 16, 2012 at 1:16 pm
As ever, great lecture.
Quick question: in both cases 190k were absorbed, but the costs are wildly different.
If I add up the overheads per unit, example a) gives me 20.68+17.84+17.84 = $56.36, and example b) gives me 18.90+18.79+23.63 = $61.32.
That then also means that the profits don’t balance. I would expect the profits per unit to be different, but that when added up they’d be the same. After all, we’ve spent the same amount, and we’ve charged the same amount (in this case there hasn’t been any over/under absorption to confuse matters).
July 16, 2012 at 6:39 pm
@andreasmacfarlane, You cannot add them up per unit. But if you multiply by the number of units produced, and then add up the totals, the total overheads will be the same in both cases 🙂
July 17, 2012 at 2:25 pm
@johnmoffat, Thanks John.
I had done that to confirm that it comes back to 190k, but still can’t work out why it then is different per unit.
It’s still the same value of direct cost, and the same value of overheads spread over the same number of units. What’s causing the difference?
Surely if you’re after bigger profits you’d then just use the first approach.
Or is it because of rounding errors along the way that the differences are more accentuated at the individual unit level than at the total inventory level?
July 17, 2012 at 5:34 pm
@andreasmacfarlane, A few things…..
Firstly, there is no logic in adding the unit costs together. Suppose apples cost $2 each and oranges cost $3 each. The total is $5 for one of each, but that means nothing to anyone – if you buy 100 apples and 1 orange, then $5 is completely irrelevant 🙂
Secondly, we can charge the overheads between the products in any way we want – for example, we could simply divide the total overheads by the total number of units produced – there is no ‘law’. What makes ABC such a good idea is that we are trying to charge them according to how much of each overhead each product is using.
Thirdly, the total profit of the business will be the same however we charge the overheads. The total overhead cost in the income statement will be 190,000 whatever happens and so the profit will not be affected. The reason we want to charge the overheads to products in a ‘fair’ way is because if we know how much it costs to make one unit we can then decide how much to charge. If one product costs a lot to make then we obviously want to charge a high price. (And of course changing the selling price will effect the profit)
July 18, 2012 at 7:18 pm
Thanks John, that makes a whole lot more sense like that now.
Thanks for your time.
June 5, 2012 at 8:14 pm
Very helpful, thanks!
June 5, 2012 at 3:01 pm
June 5, 2012 at 8:27 am
kindly help please, i am unable to fully load the video and then disconnect to Internet and view the entire lecture.there’s no telephone line installation and so i used a usb emtel internet key….please help thank you
adel mokbel says
June 1, 2012 at 9:59 pm
April 22, 2012 at 9:22 am
April 21, 2012 at 8:03 pm
Really nice, i would even say interactive. Makes you think, good pace, clear english. Like it very much
March 12, 2012 at 4:00 pm
this is beautiful,am so happy anout this
March 12, 2012 at 1:16 pm
enjoyed the presentation well done
March 5, 2012 at 11:40 am
its wonderful to listen to these lectures.keep it up
February 20, 2012 at 2:55 pm
Im glad im here…thanks a million open tuition
February 4, 2012 at 11:26 pm
February 1, 2012 at 7:46 pm
Thanks a lot. The lecture was really good.
February 1, 2012 at 1:06 am
its fantastic lecture to do the perfect study and i would like to know that is it possible to provide that kind of video lecture in other subject .for example f1
January 23, 2012 at 3:05 pm
January 18, 2012 at 11:42 am
thank u so much for such a wonderful lecture
kindly plz tell me the avg marks this example covers in exams
November 21, 2011 at 7:23 am
November 19, 2011 at 2:55 pm
A job well done. Thanks
September 26, 2011 at 8:05 am
Great Job….very very well done….
September 13, 2011 at 7:55 pm
I am loving it!!!!
September 8, 2011 at 10:23 pm
Great lecture. well explained. Really grateful for the useful little exam tips the lecturer gives.
September 7, 2011 at 8:45 pm
Great lecture, clearly explained and easy to listen to
June 22, 2011 at 7:23 pm
whats problem with them why bot stand at one place do they have stomach problem loll
they get away from microphone and cause very diviation
June 9, 2011 at 2:54 pm
Great job.God bless
May 24, 2011 at 12:04 pm
May 2, 2011 at 9:08 am
i love this, one of the best i have seen in recent times. is there a way i can get a video copy.
April 20, 2011 at 2:14 pm
i must say that i realy like this lecture. perfect job done by OpenTuition. Thanks a lot.
April 16, 2011 at 11:59 am
Yeah. He makes a lot of sense. Great job!
April 12, 2011 at 6:23 pm
Best method for teaching. Awesome. Its like student is sitting in classroom and also the tutor is very very good.giving good examples in between letures.
Thank you open tuition
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