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July 4, 2018 at 11:10 am
how are we supposed to solve the 1st question, we are not given the fixed costs
John Moffat says
July 4, 2018 at 1:45 pm
You have to calculate them. You know the absorption rate, you know the budgeted activity level, and you know that the fixed costs are as budgeted!!
(I assume that you have watched the lectures before attempting the test?)
June 24, 2018 at 7:40 am
Hello Sir, In question 5 why didn’t we absorb the fixed selling cost? ($12000)
June 24, 2018 at 7:51 am
Sorry i got it! The increase or decrease in inventory has nothing to do with selling cost that ll be deducted later from the total contribution if we prepare Profit loss statement.
June 24, 2018 at 8:40 am
April 17, 2018 at 10:19 am
yeah your questions are quite interseting.they help us a lot to prepare for the exams
April 17, 2018 at 1:30 pm
Good – although do make sure you buy a Revision Kit from one of the ACCA approved publishers. It is important to practice as many exam standard questions as possible, and the Revision Kits have lots of questions.
August 15, 2017 at 8:34 pm
Hello, in question 5, why do we use the normal activity level and not the actual amount sold when calculating the fixed overhead absorption rate?
August 16, 2017 at 9:35 am
We need to cost in advance and so we always use budgeted overheads and budgeted production to calculate the absorption rate.
Did you watch the free lectures before attempting the test? The lectures are a complete free course and cover everything needed to be able to pass the exam well.
August 16, 2017 at 1:50 pm
Yes, thank you, that makes sense now.
August 16, 2017 at 4:24 pm
July 9, 2017 at 12:10 pm
In question 1 why we didn’t adjust profit for over absorption as actual outputwas more than budget total???
July 9, 2017 at 2:30 pm
The absorption profit given in the question will have been after any adjustment necessary.
The question wants the marginal profit, and you will know from the free lectures that the only difference ever between marginal and absorption profit is the change in the inventory multiplied by the fixed costs per unit.
July 9, 2017 at 2:35 pm
i dunno what u meant..the sales income is constant no matter what kind of way u take,but the profit changes becoz of the change ofthe costing.As we all know,difference in profit =change in stock ^OAR/unit ,so the difference is 200^12=2400, and we know output>sales volumn,so within marginal costing,the profit will be reduced, 200
July 9, 2017 at 2:44 pm
Which is what I wrote in my reply 🙂
May 17, 2017 at 9:10 pm
in question 5 how is the inventory increasing? 14000 production and 12000 sales. how is it increasing?
May 18, 2017 at 6:51 am
If you produce more units then you sell, then the extra units go to increase the inventory!!
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