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MA Chapter 4 Questions Cost Classification and Behaviour
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question 4 commission is classified as which type of cost? can you help me to explain in more details
It is a selling cost, not a cost of production.
100%
in q4 why the commission paid to sales person won’t be taken as production cost?
It is a selling cost. It does not affect the cost of actually producing the goods.
Hello, for question 3, I used the high low method to answer this question and I didn鈥檛 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鈥檛 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
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?
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.
No, I don’t leave.. I’m still pursuing ACCA Financial and Management
Accounting Level ( FA 2 and MA 2)
would some more q8estion like q2
You should buy a Revision Kit from one of the ACCA Approved Publishers. It is full of exam standard questions for practice.
sorry sir i need a better explanation on this question
You do not say which question you are referring to!!!
(I assume that you have watched the free lectures)
Please Sir l need better explanations on q2 and q3
In question 2 where did the 30,000 come from
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.
Hi can you please explain how the difference of costs 35000 was calculated?
I assume you are referring to question 2, in which case the difference between the total costs is 170,000 – 135,000 = 35,000.
question second.
the variable cost (170000 – 135000)/(22000 – 16000)
is 5.83 ig
considering that the i got 163320 as my answer
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.
thank you for your assistance
got that.
You are welcome 馃檪
How was the total cost for 22000 units derived after find the variable cost per unit which is $5
For Q3
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.