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Dear Tutor
Hope you well
Can you please assist me with following, your help will be much appreciatedF2 STANDARD COSTING
Number 227 why they divide 36000 by 10 multiply by 100, I thought to do like this 36000×10/100
Number 230 I’m confuse of why they added 2000 as it was an adverse
Number 236 I was trying to check how did they calculated 2.08
Number 240 1250/2multiply by 98, I did like this 1250×2/100-1250
Number 249 the figure of 1650
Number 255 the figure of 29000Marginal and absorption F2
Number 104 I’m a bit confuse here to see that the marginal profit is lower than absorption profit.
Number 108 not clear about the calculation from 45/750×100
Number 110 here 2000 units where does it comes from
Number 115 I’m not clear at all hereJOB, BATCH AND PROCESS COSTING
Number 122 calculation of normal loss , 10% which will be 1320 but they devided by 110.
Number 125 this 75% used to calculate closing inventory how did they come with.
Number 126 why they used production units instead of sales units
Number 135 not clear in this one
Number 136 figures for conversion costs,15 and 165.227 If the actual expenditure was 10% above budget then it means that the difference (i.e. the variance) was 10% of budget. So if 36,000 is 10% it means that the budget must have been 360,000. Actual is higher and so actual is 396,000
230 If the variance is adverse it means that the actual figure is worse than budget – i.e. the actual expense is higher
236 Because the rate variance is 706 adverse, it means that the standard cost for 10,080 hours is 8770 – 706 = 8,064
So the standard rate per hour is 8064/10080 = $0.80
The efficiency variance is 256 favourable so they actually worked fewer hours than expected. At standard cost of 0.80 per hour they worked 256/0.80 = 320 fewer hours. So standard hours would have been 10,080 + 320 = 10,400. This is for 5,000 units and so standard time per unit = 10040 / 5000 = 2.08 hours240 You have made the same mistake as in 227. Check you understand 227 and then try this one again
249 For 500 units, they should have used 500 x 3 = 1500 kg. However there is a usage variance of $300 which means that (at standard cost of $2 per kg) the actually used 300/2 = 150 kg more than they should have. 1500 + 150 = 1650
255 This is the same sort of problem as 236. Check you understand 236 and then try this one again
104 If production is greater than sales, inventory will increase and so absorption gives the higher profit (as in this case). If production is lower than sales, inventory will fall and so marginal gives the higher profit. (If you are unclear as to why this is the rule, then watch my lecture again, but you must learn the rule!)
108 Have you typed your problem correct? I do not see why 45/750×100 is relevant in the answer.
110 2000 units is the increase in inventory (they produce 15000 units but only sell 13000 units)
115 The best way of getting the correct answer is to make up a few figures (but obviously ignore option D because fixed costs do not affect the contribution. For example suppose that selling price was $20, variable cost was $8, and volume sold was 1,000. Work out the total contribution and then see what happens if each of them separately increase by 10%. (Make up any figures you want to).
122 The question says that the normal loss is 10% of output. You have taken 10% of input.
125 It is because three quarters (i.e. 75%) of materials are added at the start of the process.
126 When we use the sales value method, we always use the total sales value of the production. The joint costs are spent producing and must therefore be spread over the production. (The units that are not sold remain in inventory)
It is a standard trick for the exam – watch my lecture if necessary.135 If the % complete of closing WIP is understated it means that the true percentage is higher, which means that the total equivalent units will be higher. Higher equivalent units (and the same total cost) will mean less cost per unit.
136 Presumably you are happy that the abnormal loss is 30 units. However since the losses are discovered when they are 50% complete, then for conversion costs this is equivalent to 30 x 50% = 15 units. (This is not relevant for materials because they are automatically 100% complete as soon as the work is started.)
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