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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?
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.)
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?
Never mind, I just calculated the cost per unit at each stage, rather than total overheads per stage. End result is the same, sorry!
No problem – glad you sorted it
is it possible to download the f5 lectures? because i’ m constantly failing, please help, anyone.
Lectures are not downloadable – they can only be watched online.
It is the only way that we can keep this site free of charge.
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
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.
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!
Phew! These lectures make them look a whole lot easier. Wonder why study texts complicate simple matters. Success is mine.
can someone help me with these videos? i am finding it difficult to download.
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.
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?
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)
Thanks alot! all doubts cleared ^_^
sir download is not avalible
Lectures are not downloadable – only the Course Notes can be downloaded.
Good explanation. Better understanding and enable me to be more familar with the management accounting, restoring my confidence on it. Thank you so much!
All i need is to pass thank you so much for the great work
Great great great but lecture but need a sequence b/w lecture I and lecture 2. Allah bless you.
Well done Lecturer, good source especially for people like me who find it difficult to get Tuition providers nearby.
i cant view the lecture, can somebody assist me. the site keep showing 404
You need flash player
Are you using android?
greeat lecture, God bless.
Thank You… Great lecture…..
Thank you my lecturer….Hopefully I will pass this paper in June.
Thank you. I hope you will pass also
Thanks, very helpful & great service.
keep it up
very helpful, thanksssssssssssssssss!
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
i got much more things in your lecture which i did not get in class, thanks a lot, so much happy with your lecture.
Thanks a lot its helpful
please in an exams setting can I show all my workings?
@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.
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).
@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
@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?
@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)
Thanks John, that makes a whole lot more sense like that now.
Thanks for your time.
Very helpful, thanks!
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
Really nice, i would even say interactive. Makes you think, good pace, clear english. Like it very much
this is beautiful,am so happy anout this
enjoyed the presentation well done
its wonderful to listen to these lectures.keep it up
Im glad im here…thanks a million open tuition
Thanks a lot. The lecture was really good.
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
thank u so much for such a wonderful lecture
kindly plz tell me the avg marks this example covers in exams
A job well done. Thanks
Great Job….very very well done….
I am loving it!!!!
Great lecture. well explained. Really grateful for the useful little exam tips the lecturer gives.
Great lecture, clearly explained and easy to listen to
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
Great job.God bless
i love this, one of the best i have seen in recent times. is there a way i can get a video copy.
i must say that i realy like this lecture. perfect job done by OpenTuition. Thanks a lot.
Yeah. He makes a lot of sense. Great job!
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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