Relevant Costing

This topic contains 7 replies, has 3 voices, and was last updated by Avatar of johnmoffat John Moffat 4 months, 2 weeks ago. This post has been viewed 286 times

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    dookhan12
    Participant
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    Good morning,
    Hi F5 Tutor, I am currently studying the topic of Relevant Costing under Section B: Decision Making of the ACCA F5 Syllabus.

    I have a question with regard to further processing decisions.
    Am I required to know how to prepare a process account, FIFO and Average method valuation of CS?

    OR

    Am I just required to know how to apportion common costs using the:
    - physical units basis
    - sales value at split off point
    - final sales value (market value)

    How will a further processing question come and examine?

    Thanks!


    Avatar of johnmoffat
    John Moffat
    Keymaster
    • Topics: 3
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    In theory, process costing is examinable in F5 because it is in the syllabus for Paper F2.

    However, process costing (including joint costs) has never been asked in F5 and I will be very surprised indeed if it ever is asked. If you want to be 100% safe then you can find lectures on this in the F2 section of the website, but I really would not waste your time unless you know everything else perfectly and have lots of spare time :-)


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    dookhan12
    Participant
    • Topics: 15
    • Replies: 24

    Thank you so much! :)
    I must also say thank you again for providing those really helpful lectures.
    Would you believe I spend a lot of money for tuition and I did NOT understand divisional performance measurement in F5 or even what was a division back in F2 and I watched your video and I understood the principle so well that when I look at a past paper question, I am able to work out the question with no problems basically.

    What I also realized is that once you grasp that principle, no matter what question is in front of you, you will be able to tackle it.

    Again, THANK YOU!!! :) :)


    Avatar of johnmoffat
    John Moffat
    Keymaster
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    Thank you :-)


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    Akis
    Participant
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    Hello John ! As I was reviewing the exercise with perfumes “Sniff” I was wondering if we were told that the extra labour needed, could be replaced with unskilled workers, then we would account for the lost contribution as well?

    Generally, we should be told that the labour we need to complete a project cannot be found, in order to account for lost contribution ?


    Avatar of johnmoffat
    John Moffat
    Keymaster
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    Lost contribution is only relevant if we are taking labour away from some other work and therefore losing production (and therefore sales).

    If we are not losing other production (e.g. because the workers have spare time; or because we can find other workers) then there is no lost contribution.


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    Akis
    Participant
    • Topics: 0
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    Thanks very much for your quick response ! You are AMAZING !!!!


    Avatar of johnmoffat
    John Moffat
    Keymaster
    • Topics: 3
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    You are welcome :-)

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