1. Profile photo of Erica says


    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.

      • avatar says

        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?

        Thank you…

      • Profile photo of John Moffat says

        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)

  2. avatar says

    Hi John,

    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?

    • Profile photo of John Moffat says

      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.

  3. avatar says

    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.

  4. avatar says

    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.

  5. avatar says

    I just joined this online Open 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.

    • Profile photo of John Moffat says

      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.

    • Profile photo of John Moffat says

      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.

  6. avatar says

    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.

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