聽
MA Chapter 8 Questions Accounting for Overheads
Reader Interactions
Comments
Leave a Reply
You must be logged in to post a comment.
Free ACCA & CIMA online courses from OpenTuition
Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams
June 2025 ACCA Exams
How was your exam? Comments & Instant poll >>
20% off ACCA & CIMA Books
OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>
On the last question why did the answer ignore the materials?
It used when calculating the prime cost only.
The answer does not ignore the materials!!
this lecture is the best I am fully focussing on this lecture rather than my local lecture
Thank you for your comment 馃檪
Good day
Why does the actual fixed overheads differ from budgeted fixed overheads?
Because it is impossible to forecast exactly what will happen in the future.
are delivery costs to customers non-production overhead costs?
Yes
Thank you Sir, got 75% had made a mistake on Q4 but I have rectified it. your lectures are simple and straightforward Thank you.
Hello, still struggling to understand qn 3. Kindly take me through plz
It is very similar to an example that I work through in the lecture.
The number of hours that are worked in cost centre X are (8,000 x 3.0) + (8,000 x 2.5) = 44,000 hours.
The total overheads in cost centre X are $88,000.
Therefore the overheads per hours are 88,000 / 44,000 = $2 per hour.
In a similar way, the overheads in cost centre Y are $4 per hour.
Therefore the total overhead cost of product M is (2.5 hours x $2) + (2.0 hours x $4) = $13 per unit.
Thanks much Sir.
Gat it now
Hello sir,
If cost centre is also an item of equipment as per Q2, then what is the difference between an item of cost unit and an item of cost centre ?
Cost units are what we are producing.
Thank you Sir, for this amazing lecture. 馃檪
And the free quizzes like this 馃檪
Thank you for your comments 馃檪
I got 100%
I still wonder why $400 of direct labor is calculated in non-production overheads
Non-production overheads are absorbed at rate of 120% of prime cost: Prime cost= direct material+direct labour= 300+400=700, then 120% of 700 means 840. In general, non-production overheads are absorbed per labour hour or machine hour, etc since what the question specifies for a base. In this example, it mentions, absorption is based on the rate of prime cost, so you need to follow what the question says.
FYI:
Choosing the appropriate absorption base
The different bases of absorption are as follows.
? A percentage of direct materials cost
? A percentage of direct labour cost
? A percentage of prime cost
? A rate per machine hour
? A rate per direct labour hour
? A rate per unit
? A percentage of factory cost (for administration overhead)
? A percentage of sales or factory cost (for selling and distribution overhead)
I do not understand how you got 50 hours for #4?
Total $400 direct labour and $8 per direct labour hour, divide it then you will get 50 hours
馃檪
100% Correct
Sir can you please tell us the marks distribution as per the topic i. e Weitage as per topic for Exam?
The ACCA does not give weightages for each topic.
Q 3 is confusing
It is a past real exam question (and is similar to one of the examples that I work through in my free lectures) 馃檪
i didnt understand the 3rd question. do i have to prepare a cost card in it?
No, the question just wants you to calculate the fixed overheads per unit for product M.
You need to calculate the overhead absorption rate for each of the 2 cost centres as I do in the free lectures, and then you can calculate the fixed overheads for product M.
Thank you, sir. I think I need a lot of practice!
You are welcome 馃檪
100%