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September 29, 2017 at 7:23 pm
Hi, for the depreciation costs why is it 3/7, 3/7 and 1/7?
John Moffat says
September 30, 2017 at 10:30 am
Because the value of the machines is 300,000; 300,000; and 100,000, which is 700,000 in total.
December 18, 2017 at 3:53 pm
Hi John why do we need to include service overheads into production? why can’t we list it Independently ?
December 19, 2017 at 7:45 am
Because the ultimate purpose is to get the cost of units produced, and the service departments do not produce anything.
August 9, 2017 at 2:24 am
Your explanations are very clear and logical. You are an excellent lecturer indeed.
August 9, 2017 at 6:52 am
Thank you for the comment 🙂
ali johar says
July 30, 2017 at 11:31 pm
thank you for your wonderful lectures they made f2 very easy for me.
July 31, 2017 at 2:21 pm
Thank you for your comment 🙂
March 28, 2017 at 4:56 pm
I wonder if he actually knows that he’s a great lecturer. Working away, enjoying the problems like…for free! What a legend!!!
March 28, 2017 at 5:05 pm
Thank you very much for your comment 🙂
October 25, 2016 at 9:08 pm
You are definitely paying it forward in helping millions free of charge… Thank you for your amazing lectures and kind heart..?
October 26, 2016 at 6:18 am
You are welcome, and thank you for the comment 🙂
September 30, 2016 at 12:57 am
gr8 leacture gr8 teacher open tuition is doing excellent for those who cant afford study or for those who want to do self study
September 30, 2016 at 12:55 am
wonderful lecture gr8 teacher
September 30, 2016 at 12:11 pm
Thank you for your comments 🙂
February 18, 2016 at 1:15 am
Hello. Why did you take 90 for welfare costs? And it is not 50+40+10? Please explain me. I’m confused.
February 18, 2016 at 1:17 am
Didn’t watch what came after. I’m sorry.
February 18, 2016 at 7:33 am
November 23, 2015 at 7:21 pm
why did you do 50/80? did not get that part
November 23, 2015 at 7:23 pm
i got it
October 9, 2015 at 2:13 pm
Thanks for your lectures.
October 9, 2015 at 2:27 pm
You are welcome 🙂
October 2, 2015 at 8:53 am
October 2, 2015 at 8:48 am
50 + 40 + 10 is not 90! very funny thank you for the laughter during an accountig lecture!
October 2, 2015 at 8:43 am
great lectures they are a great help. Thank you ever so much.
October 2, 2015 at 9:09 am
I am pleased that you like them 🙂
Tai Wo says
June 5, 2015 at 12:52 am
factory heat shpuld be allocated to fACTORY
June 5, 2015 at 7:48 am
It is – all the departments are in the factory otherwise there would be no point in the whole question!!!!
July 6, 2015 at 9:13 pm
sir I don’t understand how you got 39$
July 7, 2015 at 8:21 am
I assume you mean the cost of a desk in example 3 ?!!!
Materials are $12 per unit. Labour is 4 hours x $2 = $8 per unit. Assembly overheads are 3 hours x $3 = $9 per unit. Finishing overheads are 1 hour x £10 = $10 per unit.
Total = 12 + 8 + 9 + 10 = $39
(You can see answers to all of the examples at the end of the Lecture Notes)
June 4, 2015 at 1:04 am
Hello!. I have a question regarding the example 3. When I address this example, I added the labour cost for assembly and finishing department. [For example, for chairs,I added 3hr*2$(assembly) + 1hr*2$(finishing) to the answer you got in the lecture] Is it absolbed into the each department’s overheads?? Thanks for your lecture and care.
June 4, 2015 at 7:40 am
But I have included the labour in the cost cards (you certainly don’t include them in overheads).
For chairs I have charged for labour 4 hours at $2 (which is exactly the same as having 3 hours at $2 and 1 hour at $2).
Check the answer again (it is at the back of the lecture notes).
June 4, 2015 at 7:56 am
Oh you are right. I thought it takes 4 hrs to make chairs itself and take extra 3hrs on assembling and 1hr on finishing additionally.
Now everything is clear for me.
Thanks for the fast reply ; )
March 12, 2015 at 8:02 pm
hey, at 27:40 the lecturer talks about rounding off to the nearest dollar… my question is if we have to round off to the next dollar whatsoever the amount is i.e if the amount is $12.5 we round it off to $13 but if the amount is $12.3 do we round it to $13 or we round it to $12????? thanking you in advance, thanks
February 24, 2015 at 8:48 am
depreciation of equipment am not getting it i thoght of 7000/3000000 why did you put nbv up instead of deprciation to be up kindly explain
February 24, 2015 at 9:25 am
The depreciation is $7,000. On the information given, the only sensible way of apportioning it is to base it on the net book value of the equipment in each department. The total NBV of all the equipment is 300,000 + 300,000 + 100,000 = 700,000. Since processing is 300,000 out of the total, the amount of depreciation given to processing is therefore 300,000/700,000 x 7,000 = 3,000. Same for the other departments.
October 25, 2014 at 4:52 am
why is it that people find cost accounting papers so difficult?
October 24, 2014 at 2:09 pm
to be specific accounting for overhead ‘b’ is showing Financial Reporting
October 24, 2014 at 2:17 pm
try another browser, or device..
October 24, 2014 at 1:51 pm
I have selected to watch accounting for overheads, but the video which is showing is financial reporting. Please help!!!!
September 18, 2014 at 10:12 pm
Great explanation…BTW if i was sitting their i could point out the miscalculation. I do point while listening lecture and was rechecking…thought i might be wrong…
I didn’t ever get bore during lecture. THANKS.
July 17, 2014 at 12:31 pm
Hi John. Why do you allocate the canteen expense only to canteen? I cant get the logic. Doesn’t all three departments benefit from the services of the canteen?
July 17, 2014 at 4:11 pm
In fact only 2 departments benefit from the canteen – the canteen is only there to feed the employees in the other 2 departments.
If you continue with the next example you will see that having got the total cost of the canteen, we then recharge it to the two production departments.
The approach is always the same – we first allocate and apportion overheads between all of the departments. Then we recharge the service departments to the production departments.
Example 4 specifically asks for the overheads to be split between all three departments; example 5 then asks for the canteen costs to be reapportioned to the other two departments.
June 6, 2014 at 8:12 pm
I assume that you mean example 3 and that you have downloaded the Course Notes.
The question says (about 4 lines from the end) that the remaining overheads are to be split 40% to assembly and 60% to finishing 🙂
Carl Andrew says
June 6, 2014 at 12:13 pm
Can someone explain to me why the remaining fixed over cost of $600,000 was splitted so? 40% to assembly and 60% to finishing.
August 15, 2014 at 8:02 am
It is stated in the question. @Carl Andrews
google search says
May 3, 2014 at 11:49 am
I am doing FIA FA1,FA2, MA1 MA2 in June I wish I has found these videos earlier then I would not feel so lost in my class. Thank you. i watch your videos and work along with the examples before I go to my accounting classes each week. Your videos makes the topics so much clear.
April 29, 2014 at 5:35 pm
For example 3, any reason why supervisors salary is considered while calculating absorption rate? I understand supervisor’s salary is non-production cost. Please help. Thanks!
April 29, 2014 at 6:09 pm
Assuming that the supervisor is in the factory (supervising the factory workers) then he is a production overhead 🙂
May 1, 2014 at 10:42 am
unless otherwise specified in a question, it would be part of production overhead?
May 1, 2014 at 11:01 am
Yes – although it would almost certainly be specified.
September 23, 2013 at 3:20 pm
Thank you it is helpful. I hope the lecture also shows how can tacle the exam Q&A techniques.
God bless Opentuition!!
September 7, 2013 at 1:35 pm
Hi John, the video doesn’t.work for overheads part b …. It gets stuck on 5:13 … Could you take a look please? Btw … Good course I have been learning with a view to take F1 2 and 3 in december but could do with lots of practice questions? Any suggestions ? Thanks… Simon
September 7, 2013 at 7:19 pm
The video is OK – I think it must be your internet connection.
For practice questions you really need to get hold of revision/exam kist from one of the approved publishers.
September 3, 2013 at 1:48 am
Can I get the working for test question 4 (chapter 7). The answer is £2840 but how is this calculated? And would it not be more helpful to show how you get to the answer rather than just give an answer? Just a suggestion. Thanks anyway for the help and its is much appreciated.
September 3, 2013 at 8:41 am
I assume you mean test question 5 🙂
Because the labour is $400 in total and is paid $8 per hour, it means that there must be 50 hours of labour.
Production overheads are $26 per labour hour, and so total production overheads are 50 hours x $26 = $1300.
The prime cost is materials + labour = $300 + $400 = $700, and so the non-production overheads are 120% x $700 = $840.
So……the total cost of the job is $300 (materials) + $400 (labour) + $1300 (prod o/heads) + $840 (non-prod o/heads) = $2840
September 4, 2013 at 12:24 am
Yep that’s the one. So it was just dividing the 8 per hour by labour, make sense. Thanks for the quick reply.
August 21, 2013 at 11:21 am
Trying to get lectures on overhead. How do i get them
June 11, 2013 at 4:34 am
Dear Tutor Why don’t we allocate Factory canteen expense base on the Number of Employees ?
June 11, 2013 at 6:22 am
We have apportioned it on the number of employees. You could have apportioned it earlier (and would have got the same final answer), but since it is a cost centre on its own it is more sensible to get the cost of the canteen separately and then apportion this cost on the basis of the number of employees.
May 15, 2013 at 1:23 pm
ok i still dont get what he was doing at 23:55. did you divide 50 by 80??? or what?? because im trying to understand but still i dont get i.
May 15, 2013 at 2:24 pm
The answer is in one of the posts below.
The total space is 80,000 m^2. Of this, 50,000 is processing. Therefore processing has been given 50,000/80,000 of the total cost. (50/80 is the same as 50,000/80,000)
May 14, 2013 at 7:00 pm
Thank you for the great lecture! Very helpful!
December 16, 2012 at 3:18 am
Hi I don’t understand 23.55 where did he get 50/80000 I know 80000 is the total but I don’t know where he got the 50% from can some one help me plz
December 16, 2012 at 3:59 pm
@hussain87, Its not 50%! It is 50,000/80,000 (or 50/80) because processing has 50,000 space out of a total space of 80,000.
November 26, 2012 at 7:55 pm
thanks good job
October 29, 2012 at 4:17 pm
Thanks Open Tuition
October 2, 2012 at 9:27 pm
very clear and concise, it all makes more sense, i can rewind, pause certain parts i wasn’t too sure about previously and it’s all freee!! shazia siddiq
September 26, 2012 at 2:35 pm
Wonderful is all that I can say
August 21, 2012 at 1:15 am
Please where and how can i get the examples sheet they are solving? Thanks.
August 21, 2012 at 7:24 am
@examsuccess, If you look above the lecture it explains that all the lectures are using the free Course Notes that are available on this website.
July 18, 2012 at 5:21 am
Really good explanation, thanks so much.
Uzair Tareen says
July 4, 2012 at 3:25 pm
Can’t seem to play the above video ”accounting for overhead Part b”, I am getting the following message: Server not found: rtmpt://r.acca.opentuitioncom.netdna-cdn.com:80/play
July 4, 2012 at 4:44 pm
you are behind a firewall, contact your internet provider to check this for you and un block it,
M. Osman Kamran says
June 27, 2012 at 5:57 am
Great ! It is really wonderful lecture and thanks alot from opentition.com people that help us for free learning.
June 5, 2012 at 12:14 am
excellent thank you
May 3, 2012 at 11:19 am
it helps me a lot thx
April 29, 2012 at 12:58 pm
It was really helpfull . Thank you so much !!
April 29, 2012 at 12:57 pm
It was really helpfull . Tahnk you so much !!
April 29, 2012 at 12:56 pm
It was really helpfull .. Thank you sO much 🙂
March 21, 2012 at 3:50 pm
wow this was brilliant!! wayyyy more better than reading notes! uuuf
March 9, 2012 at 7:19 am
March 7, 2012 at 5:07 pm
please help no sound
March 5, 2012 at 1:13 pm
simple and clear workings & gorgeously explained :).
You did try n be pretty in your workings tho 😛
February 8, 2012 at 2:11 pm
REALLY GOOD & HELPFUL
MUST WATCH IT GUYS……………………………………………….
February 3, 2012 at 10:49 am
Just brilliant! Thank you!
December 30, 2011 at 6:06 pm
Very effective for practice.
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