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MA Chapter 4 Questions Cost Classification and Behaviour

VIVA Subject Guide
 

96 Comments

  1. Henry
    100%
  2. SAUMYAMUNDHRA
    Got 100%
  3. Michelle
    YES NO 2 TRICKY. I GOT 163K. NEVER DECREASED THE 5K
  4. Belinda
    80%
  5. Mike
    Aah i've got it!
  6. John MoffatTutor
    Great :-)

    (You can see the working for all of the answers if you click on 'review quiz' after submitting your answers)
  7. Mike
    Hi, For Question 2, the answer i keep on getting is 58,200 what could i be doing incorrect? can you work through the example for me? Thank you, have a great evening.
  8. Vi
    Same, I think the working out is wrong.
  9. Vi
    Same, I think the working out is wrong. Because, the difference between the High and the Low TC is 35,000 not 30,000 as mentioned in the answers.
  10. John MoffatTutor
    No, the answer is correct. 5,000 of the difference is due to the step up in the fixed cost and so only the remaining 30,000 is due to the change in the total variable cost.
  11. Ahmed Abdala Abdirahman
    80%
  12. Ragavendra
    3 out of 5
  13. Faith
    80%
  14. Vy
    question 4 commission is classified as which type of cost? can you help me to explain in more details
  15. John MoffatTutor
    It is a selling cost, not a cost of production.
  16. Nayana
    100%
  17. livers
    in q4 why the commission paid to sales person won't be taken as production cost?
  18. John MoffatTutor
    It is a selling cost. It does not affect the cost of actually producing the goods.
  19. S
    Hello, for question 3, I used the high low method to answer this question and I didn’t get an answer anywhere near 120,000.

    I got to the point of calculating that the cost per unit was $5 and then I determined the fixed cost of 100,000 and I multiplied 22,000 units by 5 and added the fixed cost which was a number way higher than 120,000.

    How come the high low method didn’t work here and how would I go about solving a question like this?

    Please can you expand on the explanation provided.

    Thank you so much
  20. John MoffatTutor
    The high low method does work here!!

    The variable cost per unit is (135 - 110,000) / (25,000 - 20,000) = $5

    The fixed cost is therefore 110,000 - (20,000 x 5) = $10,000. I don't know how you managed to get it to be $100,000.

    Therefore the total cost for 22,000 units is (22,000 x 5) + 10,000 = 120,000

    Have you watched my free lectures on this?
  21. S
    Yes I have been watching the free lectures and thank you so much for your response and the help. I really appreciate these lectures and everything OpenTuition has to offer.
  22. Win Win
    No, I don't leave.. I'm still pursuing ACCA Financial and Management
    Accounting Level ( FA 2 and MA 2)
  23. Salmaan
    would some more q8estion like q2
  24. John MoffatTutor
    You should buy a Revision Kit from one of the ACCA Approved Publishers. It is full of exam standard questions for practice.
  25. Tatenda
    sorry sir i need a better explanation on this question
  26. John MoffatTutor
    You do not say which question you are referring to!!!
    (I assume that you have watched the free lectures)
  27. LUCRISHA
    Please Sir l need better explanations on q2 and q3
  28. Koome
    In question 2 where did the 30,000 come from
  29. John MoffatTutor
    The difference in the total cost is $35,000. $5,000 of this is the extra fixed cost and so only the remaining $30,000 is the extra variable cost due to producing more units.
  30. chloe
    Hi can you please explain how the difference of costs 35000 was calculated?
  31. John MoffatTutor
    I assume you are referring to question 2, in which case the difference between the total costs is 170,000 - 135,000 = 35,000.
  32. darshan
    question second.
    the variable cost (170000 - 135000)/(22000 - 16000)
    is 5.83 ig
    considering that the i got 163320 as my answer
  33. John MoffatTutor
    5,000 of the increase in the total cost is due to the step-up in fixed costs, so only the rest of the difference is due to variable costs.
    You can find the workings by clicking on 'review quiz' after submitting your answers.
  34. darshan
    thank you for your assistance
    got that.
  35. John MoffatTutor
    You are welcome :-)
  36. Roselyn
    How was the total cost for 22000 units derived after find the variable cost per unit which is $5
    For Q3
  37. John MoffatTutor
    The fixed cost must be the same at each level, and therefore the only difference between the total cost of 22,000 units and the total cost of 20,000 units must be the extra variable cost f the extra 2,000 units.
  38. Dev
    Why is packaging counted as production cost? Shouldn't it be classified as distribution costs?
  39. John MoffatTutor
    I assume that you are referring to question 4.

    It is counted as a production cost because they are only moved to the warehouse (according to the question) after they have been packed. Therefore they only sell goods that have already been packed.
  40. Mannan
    Truck drivers in the stores of an engineering company are indirect labour but wages given to those truck drivers classify as a production cost or non-production cost?
  41. opentuition_teamAdmin
    If they are driving raw materials in the factory then they are a production cost.
  42. Sohaib
    sir i do get that we in question 2, we need to subtract the step up of 5000 from the total costs. but why would we need to do so?
  43. John MoffatTutor
    Because 5,000 of the difference in the total cost is due to the step-up. Only the rest of the difference is due to the variable cost of the extra units.
  44. Esther
    If total cost is equal to variable cost plus fixed cost then where exactly are we accounting for the 5000 of fixed cost in question 2, because it seems we only used the variable cost per unit all through the calculation
  45. John MoffatTutor
    Because part of the increase in the total cost is due to the extra fixed cost. Only the rest is the extra variable cost of the extra units.
  46. Bilal
    In which function does the inspecting cost fall?
  47. John MoffatTutor
    It is classed as a production cost.
  48. Riya
    @John Moffat but sir how?
  49. John MoffatTutor
    Production costs are those costs that are incurred in ending up with finished goods that are ready for sale - i.e. costs in the factory.

    Inspection will take place in the factory so that only 'good' units leave the factory.
  50. Nyasha
    Thanks for the practice, it helps open up our minds
  51. Tushar Gujral
    sir in question 2 need to ask doubt, so whenever there is an increase in the fixed cost the variable cost decreases with the same amount
  52. John MoffatTutor
    The total cost is always the total variable cost plus the total fixed cost. Therefore if 5,000 of the increase in the total cost is due to an increase in fixed costs, then the increase in the variable cost must be the remainder.
  53. charlotte
    Would like to know the answer and workings to this question, as when calculated my Variable cost at 5.83 and multiplied to the productivity level for 16000 and 22000 was out on the Fixed Cost by 20 is this to do with rounding? So my Fixed cost for both did not match?
    If anyone has the time to do the calculus will be much obliged
    Thanks
    Charlotte
  54. John MoffatTutor
    You have now asked this same question three times, and I have answered your post in the forums. I have also explained how, by clicking on the relevant buttons on the test, you can see the answers and the workings for all of the questions!
  55. Asif
    Hello sir

    Sir, for Q4, does packing the items not fall under logistics than in production (operations department) under Porter’s Value Chain Diagram ?
  56. John MoffatTutor
    Not at all. Packing them before moving them from the factory to the warehouse is a production cost.

    Porter's Value Chain is not relevant for Paper MA - it is not in the syllabus.
  57. Asif
    Sorry sir, I was just connecting some information I learnt from one subject to another - from BT to MA. I learnt from my notes from the Institute I go to, that outbound logistics include packaging within Porter’s value chain analyses. I guess that information is wrong, or meant that outbound logistics also may include packaging as some of their activities.
  58. David
    Asif110 Packaging also occurs within logistics when products are loaded in bulk onto pallets and wrapped in cellophane for example, but the packaging that's referred to here is the direct packaging of the individual product that the consumer will receive, thus it's a part of the finished product, thus it's a production cost.

    Also, what was meant by Porter's Value Chain not being relevant is not that what you learned in BT is wrong per se, it's just that it's not included in the Management Accounting syllabus and so you'll never be tested on it in the MA paper, so thinking about it just complicates things unnecessarily.

    Correct me if I'm wrong on any of this John!
  59. ZAHRAH
    The process of learning through opentuition is highly appreciated. Well I am still confused about the last step of Q2.
    Why we took 2000 units?? And fixed cost as $175000?
    Looking forward for your kind response. Thanks
  60. John MoffatTutor
    The answer does not take the fixed cost as $175,000. We know from the question that the total cost for 22,000 units is $170,000.

    20,000 units will have the same fixed costs as 22,000 units (because they are both over 17,500 units) and therefore the only difference in the total cost will be the variable cost of the 2,000 fewer units.
  61. ZAHRAH
    Thank you so much sir. Now I get it.
  62. John MoffatTutor
    You are welcome :-)
  63. amina27
    Thank you, sir. Your lecture was very useful. I got 100% but it took about 20mins complete. I hope I will improve soon by practicing.
  64. John MoffatTutor
    Thank you for your comment :-)
  65. Wasif
    Hi, thank you very much for the vast amount of free resources. I was amazed to find that there is a company that actually done this. I have personally attempted to do the ACCA with BPP and Kaplan and LSBF(twice) but somehow don't carry on with it after the first month or so. I hope I can stick with it now to the very end. Quite humbled to see that you provide the resources for free so hopefully that should give me inspiration to complete this. Regards.
  66. John MoffatTutor
    Thank you for your comment, and I hope you are able to stick with it to the very end :-)
  67. Wasif
    Yes I hope I can finish it to the end as well :) I think my progression is good in this module. Do you know how we can take the exam? I think I might be ready in a month to take this exam.

    Also do you recommend I buy the 2019 or the 2020 edition question revision kits from BPP?
  68. John MoffatTutor
    You can find details of where you can take the exam on the ACCA website:
    https://www.accaglobal.com/ubcs/en/student.html

    You should buy the latest edition of the Revision Kit.

    (In future please ask this sort of question in the Paper MA Ask the Tutor Forum and not as a comment on a test.)
  69. easy
    Hello Sir,

    thanks loads for your notes and lectures which are awesome, especially for those who cannot afford to attend courses.

    i have finished submit the answers - but i cannot find where to get the solution for question 2. i can see only option print results or view results

    thanks
  70. easy
    thank you i have seen it
  71. John MoffatTutor
    I am pleased that you found it :-)
  72. Hillary
    this is great
  73. John MoffatTutor
    Thank you for your comment :-)
  74. tikuku
    there is no explanation or whatsoever in the lecture or notes for me to get the answer in question 2. Get back to me please, thanks.
  75. John MoffatTutor
    The high low method is explained in my free lectures.

    This question has a little trick in it (the fixed costs increasing) but that is typical of all sorts of little tricks in the exam that the examiner does to make sure that you understand the topic and have not simply just learned 'rules'.

    The explanation that appears after you have submitted your answers and review them explains in detail how the answer is obtained. If you are not clear about the explanation then say which bit you are not clear about.
  76. Vivi
    In relation to question #2:
    (a) it states that the increase in variable cost is now $30,000 can you please explain.
    (b) 2,000 units was used as opposed to $16,000 can you please explain,

    Thank you.
  77. John MoffatTutor
    The total cost increases by $35,000. $5,000 of this is the increase in the fixed costs, so the remaining $30,000 is the increase in the variable cost.

    20,000 units will have the same fixed cost at 22,000 units. The variable cost will be lower by $10,000 because there are 2,000 fewer units.
  78. Vivi
    Thank you for your explanation, appreciated !
  79. John MoffatTutor
    You are welcome :-)
  80. theo
    Wow I never thought of solving question 2 the way itvwasvexplained in the review.
    Thanks open tuition
  81. John MoffatTutor
    You are welcome :-)
  82. Gabriel
    thank you @opentuition for making these study materials available. Much appreciation all the way from Belize Central America.
  83. John MoffatTutor
    Thank you for your comment :-)
  84. peimanghn
    Hi, we understand that this is just a quick test but i think there should be at least 10 questions so we can evaluate ourselves better. I would appreciate it, if you consider this proposal.
  85. John MoffatTutor
    We provide all our free lectures, notes, tests, and other material completely free of charge, so please do not expect more for nothing :-)

    As we make clear throughout our website, it is essential that you buy a Revision Kit from one of the ACCA approved publishers - then you will have plenty of questions to practice!!
  86. peimanghn
    Sir I live in iran and if I want to buy that book I should almost pay my one month's salary. but thanks for your usefull information.
  87. Pedro
    Thank you so much for making this available completely free, I am studying by myself and I truly appreciate it!
  88. John MoffatTutor
    I am pleased that you appreciate it :-)
  89. Patricia
    Woow I passed just failed the last one and I'm enjoying the calculations.. Wish the exam could bring more practical questions
  90. John MoffatTutor
    I am not sure whether you mean that you passed this test, or you passed the real exam :-)

    If it was the real exam, then congratulations.

    Otherwise, do make sure that you buy a Revision Kit from one of the ACCA approved publishers, because they are full of exam standard questions for practice and practice is vital for passing the exam.
  91. Martin
    I passed. I got everything correct!
    But I need that revision kit
  92. John MoffatTutor
    Do make sure to buy one and that it is from one of the ACCA Approved Publishers (BPP or Kaplan).
  93. John MoffatTutor
    aftab2628: There are enough practice questions in the Kaplan Kit :-)
    Keep practicing, watch all the free lectures, and ask in the Ask the Tutor Forum if you have any problems.
  94. uzair
    overall nice test but the number of questions should be increased
  95. John MoffatTutor
    These are only meant as quick tests.
    As we stress throughout this website, you must buy a Revision Kit from one of the ACCA approved publishers. They are full of exam standard questions for practice and practice is vital to passing the exam.
  96. aftab
    john,
    I bought revision kit from Kaplan ,what else I need to pratice more.because I am not very good in cost accounting ...just wonder if you can help me thanks

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