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Cost Classification and Behaviour part 1 – ACCA Management Accounting (MA)/you

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  1. Hello sir,
    Rent of factory and rent of offices isn’t it the same?? Then why one classified in indirect cost and the other no production cost. Can you please explain. I did read in the previous comments, still I didn’t understand

    • The factory and the offices are not the same.

      Production costs are those costs incurred in the factory to actually produce the goods. The offices are not producing anything and so their rent is an overhead i.e. and indirect cost.

    • The factory and the offices are not the same!!

      Production costs are those costs incurred in the factory to actually produce the goods. The offices are not producing anything and so their rent is an overhead i.e. and indirect cost.

  8. Based on this lecture and information I have reviewed elsewhere are you saying Prime costs are comprised of only Direct Materials and Direct Labor? Other text including BPP includes Direct Expenses! Please explain.

    • No. As I make clear in the lectures the prime costs are comprised of costs that are directly attributable (i.e. measurable) for the product. This is almost always just material and labour, because they can be measured for each unit.

  11. I have a doubt regarding the
    Indirect cost and non-production cost

    According to the lecture, “wages of accounting deaprtment” / “Rent of officies” are under the Non-production costs.
    Apart from that, “Wages of maintenance me” / “Rent of factor” are under the indirect production.
    For me, these two are sounds similar. Thus, my point is that are these two are the same? If so, indirect production costs would be the same as non-production costs?

    • They are not the same.

      Production costs are cost of actually producing. So wages of maintenance staff and rent of the factory are costs in the factory and are production costs. Wages of accounts department and rent of offices are not costs in the factory and so are not production costs.

      Indirect costs are costs that cannot be measured in each unit separately, Materials can be measured in each unit and so are direct production costs. Wages of maintenance men and rent of the factory can not be measured in each unit separately and so are indirect production costs.

  12. I check these lectures with the origin syllabus from ACCAglobal.com and I find out that there are some chapters in syllabus not teaching here, in Opentuition, or some chapters Opentuition provided but not available in the syllabus.

    Is it ok if i follow this curriculum and have exam in July 2020?
    Could I just pass the redundant chapters in Opentuition and Where could I find the chapters lacking?

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