Accounting for overheads part 3 – ACCA Management Accounting (MA)
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hi sir
in repeated distribution method is it a must to make our cost to zero, or does the question provide any details about it
Dear John,
Your lecture Notes Only Mentions “The Reciprocal & Algebraic Methods”
However, on the BPP Pass Card they’ve mentioned 2 Other Methods Known as: “The Direct Method & The Step-Down Method” (Will this Not Be Tested In The Examination?)
buddy, in the previous lecture he explained direct method and step down is a mix of both; easier than reciprocal
In the algebraic method, when attributing the $22,938 from S, 50% is attributed to X and 30% is attributed to Y.
Where is the remaining 20% attributed?
Thank you!
Those have been allocated to M which was calculated as 15000 + 0.2*S.
0.2 *S is 20% you are looking for.
Sir, would there be a problem if I am 1 or 2 off and getting $90283 & $44717 or $90285 & $44715, Using the Repeated Distribution Method?
Dear Sir,
May I have your help with this task as well?
A company manufactures two products, X&Y, in a factory divided into two production cost centres, Assembly and Finishing.
The following information is available:
Cost centre Assembly Finishing
Allocated fixed overhead costs $144,000 $82,500
Direct labour minutes per unit
Product X 36 31.25
Product Y 48 30
Budgeted production is 6,000 units of Product X and 7,500 units of Product Y. Fixed overhead costs are to be absorbed on a direct labour hour鈥檚 basis. What is the budgeted fixed overhead cost per unit for Product Y?
Solution is USD 18 but how to calculate it for Y?
Thank you very much!
Did u make sure to divide the Direct labour minutes per unit? Because they are in minutes turn them into hrs.
For X: 36/60= 0.6, 31.25/60= 0.5
For Y: 48/60= 0.8, 30/60= 0.5
and try to find labour hours for Assembly and Finishing. Check example 2 for opentuition for details.
I got assembly hr= 9600 and finishing hr= 6750
Then, try calculating OAR for assembly and finishing.
OAR Assembly= 15
OAR Finishing= 12
Finally, calculate the fixed overhead cost per unit for Y;
(0.8 x 15)= 12
(0.5 x 12)= 6
and add them together and ta-da, the answer is 18
sry, check example 3 xD
In future you must ask questions like this in the Ask the Tutor Forum, and not as a comment on a lecture.
Dear Colleagues,
May I have your help how to resolve to below task?
“A product requires 5 hours of labour at 12.50 per hour and includes direct expenses of $100. If聽Absorption rates are $16.50 per direct labour hour then calculate the total cost per unit.”
The solution is $245 but I am not able to find out how to calculate this 馃檨
Thank you very much!
Alexander
Labour is 5 hours at $12.50 = $62.50.
Overheads are 5 hours at $16.50 = $82.50.
Direct expense are $100.
100 + 62.50 + 82.50 = $245
Thank you very much! It is so simple.
What does mean – A product requires 5 hours of labour at 12.50 per hour? I do not understand this part of the sentence.
It means that it takes the worker 5 hours to make the product and the worker is paid $12.50 per hour.
Thanks for teaching me algebraic, i struggled for a while. I passed my FA Exam with a pass of 85%, im in the process of writing the MA examThanks your contributions.
Congratulations – that is great news 馃檪
On algebraic method, why do we do 1 minus 0.03s- where does the 1 come into it?
This is basic algebra.
If you subtract 0.03S from both sides, then 1S – 0.97S = 0.03S
Please explain this to me as I was not very good at algebra, why do we subtract 0.3 and what does it mean to subtract from both sides?
I am completely lost after we subtract the 0.3S as I don鈥檛 know what two sides we are subtracting it from and why we are diving after that. Please can you help me.
Thanks for the lectures
You are welcome 馃檪
Can I know how u got 0.97s?
1-0.03 . But I what also to know why S=1 ? I cannot find it from the exersice. Could you please explain it, Mr Moffat?
Thanks alot sir i had some issues with the algebraic method but with the lectures i understand it perfectly well now
Great 馃檪
Added 15,000 + 4,000 = 19,000.00
Ignore me. Thanks for this lecture!
Why didn’t you recharge the 4,000 in the first line?
I want to know as well!!!
I did!!
As AjayAnton has himself written above, I added the 4,000 to the 15,000 and recharged the 19,000.
Greatly Appreciate this Lecture !
Thank you very much:)
Thank you for your comment 馃檪
Mr Moffat , Great Lecture , thank you !
Thank you for your comment 馃檪
The Acca Platinium certified collages , Kaplan , BPP , Accowtancy – They can earn money.
But They can never earn the Love and Respect I/We have for you. Opentution is best and John Moffat is the Greatest in teaching.
there is 4 method of reapportion the overheads of service dept but you did only two: step down method and algebric method. where is other two methods?
Bro Only one method is sufficient. If every technique is presented, not only will students confuse, but precious time will be taken.
I am a math student, so Algebraic method is super easy for me.