ACCA F2 Specimen Exam Section B Question 1

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1. carl123 says

   August 2, 2016 at 8:52 am

   Sir, for question (b)(iii), why did you use the annuity table instead of the present value table?

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   • John Moffat says

     August 2, 2016 at 3:24 pm

     Because it is an equal annual cash flow and it is therefore faster to use the annuity tables.

     (Have you watched my free lectures on this? My lectures are a complete free course for Paper F2 and cover everything needed to be able to pass the exam well.)

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2. Peter says

   November 2, 2015 at 11:05 am

   A company uses standard marginal costing.Its budgeted contribution for last month was $20,000. The actual contribution for the month was $15,000, and the following variances have been calculated:
   Sales volume variance $ 5000 Adv-
   Sales price variance $9000 Fav-
   Fixed overhead expenditure variance $9000 Fav-.
   What was the total variable cost variance?. Can you Please help me out?

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   • John Moffat says

     August 2, 2016 at 3:21 pm

     You should ask question like this in the Ask the Tutor forum, and not as a comment on a lecture. I am not always able to see comments on lectures, but I always reply to questions in the Ask the Tutor Forum within 24 hours.

     The budget contribution is 20,000. After adjusting for the sales volume and sale price variances is gives a contribution of 20,000 + -5,000 + 9,000 = 24,000.
     Since the actual contribution was 15,000, the variable cost variance must be 24,000 – 15,000 = 9,000 adverse.
     The fixed overhead variance is not relevant because we are looking at the contribution.

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