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Accounting for overheads part 3 – ACCA Management Accounting (MA)

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Comments

  1. Patrickizzo says

    April 2, 2023 at 7:08 am

    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?

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  2. Cawa says

    December 12, 2022 at 7:13 pm

    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!

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    • PPT4321 says

      December 20, 2022 at 10:09 am

      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

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      • PPT4321 says

        December 20, 2022 at 10:11 am

        sry, check example 3 xD

    • John Moffat says

      December 20, 2022 at 4:03 pm

      In future you must ask questions like this in the Ask the Tutor Forum, and not as a comment on a lecture.

      Log in to Reply
  3. Cawa says

    December 12, 2022 at 5:37 pm

    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

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    • John Moffat says

      December 12, 2022 at 6:24 pm

      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

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      • Cawa says

        December 12, 2022 at 6:59 pm

        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.

      • John Moffat says

        December 13, 2022 at 8:20 am

        It means that it takes the worker 5 hours to make the product and the worker is paid $12.50 per hour.

  4. mwcassim786@gmail.com says

    November 5, 2022 at 7:10 pm

    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.

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    • John Moffat says

      November 6, 2022 at 8:16 am

      Congratulations – that is great news 馃檪

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  5. jvowles says

    January 25, 2022 at 2:31 pm

    On algebraic method, why do we do 1 minus 0.03s- where does the 1 come into it?

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    • John Moffat says

      January 25, 2022 at 3:22 pm

      This is basic algebra.

      If you subtract 0.03S from both sides, then 1S – 0.97S = 0.03S

      Log in to Reply
  6. sintayehubirkneh says

    December 25, 2021 at 1:23 pm

    Thanks for the lectures

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    • John Moffat says

      December 25, 2021 at 4:02 pm

      You are welcome 馃檪

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  7. Raheesa says

    December 24, 2021 at 1:39 pm

    Can I know how u got 0.97s?

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  8. huldaya says

    November 24, 2021 at 4:40 pm

    Thanks alot sir i had some issues with the algebraic method but with the lectures i understand it perfectly well now

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    • John Moffat says

      November 25, 2021 at 8:39 am

      Great 馃檪

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  9. AjayAnton says

    October 17, 2020 at 10:05 pm

    Added 15,000 + 4,000 = 19,000.00

    Ignore me. Thanks for this lecture!

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  10. AjayAnton says

    October 17, 2020 at 10:04 pm

    Why didn’t you recharge the 4,000 in the first line?

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    • SarahHaytasingh says

      September 20, 2021 at 8:13 pm

      I want to know as well!!!

      Log in to Reply
      • John Moffat says

        September 21, 2021 at 7:19 am

        I did!!

        As AjayAnton has himself written above, I added the 4,000 to the 15,000 and recharged the 19,000.

  11. Asif110 says

    October 13, 2020 at 4:51 pm

    Greatly Appreciate this Lecture !

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  12. foziljonkh says

    September 16, 2020 at 1:43 pm

    Thank you very much:)

    Log in to Reply
    • John Moffat says

      September 16, 2020 at 3:57 pm

      Thank you for your comment 馃檪

      Log in to Reply
  13. DhirajACCA says

    May 3, 2020 at 7:27 am

    Mr Moffat , Great Lecture , thank you !

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    • John Moffat says

      May 3, 2020 at 10:28 am

      Thank you for your comment 馃檪

      Log in to Reply
  14. lokeshdh00 says

    April 29, 2020 at 9:44 pm

    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.

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  15. ha12 says

    November 27, 2019 at 7:50 am

    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?

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    • lokeshdh00 says

      April 30, 2020 at 5:08 pm

      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.

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