Activity Based Costing part 1 - ACCA Performance Management (PM)
YouTube video
136 Comments
A
AghiadAlmousa·
Hello
Thank you for every thing .
What are the other recourses that we may need to pass the exam
J
John MoffatTutor·
Plenty of practice at exam standard questions using either or both of the ACCA website and Exam Kits from one of the ACCA approved publishers.
S
savitha·
is this lecture valid for Sep,26 attempt
J
John MoffatTutor·
Yes it is :-)
Y
YasmeenSupporter·
I would like to express my appreciation and gratitude for the whole open tuition platform. It is free but full of rich and useful content that worth a million dollars.. because of this content I pass my ACCA exams in a consistent manner…. As for PM, which I found very challenging, I must express my sincere thanks to John for helping me in passing this paper… without these lectures I wouldn’t pass so easily!
J
John MoffatTutor·
Thank you for your comment, and congratulations on passing the exams :-)
R
Roshith·
Is the video lectures for FM applicable for June 2026 exams ?
J
John MoffatTutor·
Yes they are :-)
K
kevin·
hi i have just started learning performance management after a long break. what books do you recomend?
J
John MoffatTutor·
If you are watching our free lectures then you do not really need books. However we recommend tha BPP books and, of course, the free text on the ACCA website.
K
kevin·
Thank you, would kaplan books be also ok?
J
John MoffatTutor·
Yes, sure :-)
E
Ehis·
very well sir. I combined your lectures with exam kits for MA and passed. No need for voluminous scary books.
R
Rahmat Nadaf·
will it be valid for march 2026 ?
J
John MoffatTutor·
Yes it will
A
Avinash·
Is this lecture valid for Dec'25 attempt
J
John MoffatTutor·
Yes you do need it, and our Lecture Notes do say to watch again the Paper MA lectures on Regression Analysis.
A
Ark1·
Good morning John,
Do we need to know regression for this exam? I don't think you mention it in the lectures but it is in the formulae sheet.
S
Shahzeb·
Hi John
Hello. I want to know whether these lectures are still applicable for Dec 2025 exam or not.
J
John MoffatTutor·
Yes they are - the syllabus has not changed :-)
S
Sunith·
Hi John,
Just wondering if these lectures are still applicable for the September 2025 exam?
Thanks.
J
John MoffatTutor·
Yes they are :-)
G
Gayatri·
All your videos are enough to clear acca
M
Merina·
Hello John, are these lectures useful for the March 2025 sitting? Any changes in the syllabus?
J
John MoffatTutor·
They are fine - there are no syllabus changes for March :-)
O
Oliver·
what about June 2025?
L
Leigh·
Hi John, I'm having to defer my June 2024 exam due to family health concerns. Will things change much for the September exam, will I need to re-learn any sections or will all your tuition from these lectures & the notes be fine for the September 2024 sitting? Many thanks, Leigh
J
John MoffatTutor·
The syllabus is staying the same for September :-)
L
Leigh·
Many thanks, I'm going to complete the whole training again over the coming weeks, as a good revision, and I should ace the September exam then :-)
R
ruman·
Sir is it staying the same for DEC 2024 attempt?
J
John MoffatTutor·
Yes - the syllabus has not changed.
N
Naomi·
This was very clear and insightful.
H
Husna·
Hello, I want to attempt for june F6 could I get prepaer f5 with f6? could you please guide me?
Thank you
F
Fatima·
Yes, you can. But it can be a bit tricky and hard.
J
John MoffatTutor·
Taking Paper PM and Paper TX together is recommended by the ACCA, provided of course that you have plenty of free time in which to study for them because they are indeed tricky papers (as are all the ACCA exams from Paper PM onwards).
T
Tadhg·
Hi John,
Just wondering if these lectures are still applicable for the June 2024 exam?
Thanks.
J
John MoffatTutor·
Yes of course - our lectures are always uptodate for the current syllabus.
T
Tadhg·
Great John,
Thanks very much for the response. Keep up the great work.
H
Husna·
Hello Sir I hope my text finds you well. could you please advice me which paper should I Prepare with F6?
Thank you
L
Louise·
Thank you for the lecture
M
Miski Sheikh·
I didn't understand well.
U
Usman·
Very helpful and well exlanatory
J
John MoffatTutor·
Thank you for your comment :-)
H
Hussein·
Thanks
N
Naffie·
Hello. am not able to watch the video's lectures and i have internet, can you Assis please
O
opentuition_teamAdmin·
try another browser or device,
lectures are hosted on YouTube. if you can't access YouTube, you need to use VPN,
G
Gayatri·
Is this enough to clear acca
J
John MoffatTutor·
This is just one lecture for one of the exam papers.
Our free lectures and the lecture notes that go with them cover everything needed for each of the exams. However you do also need to do lots of question practice using a Revision Kit - practice at past exam questions is essential.
A
Ahmed·
I found this lecture is very useful. Thank you very much!
J
Joseph·
I am not able to watch these videos yet I have internet, is anyone having a similar challenge?
J
John MoffatTutor·
The videos are working fine. Ask in the 'technical problems' forum if you are still having problems and admin will try to help you.
P
pearson·
Am also facing the same challenge despite having Internet 24/7
J
John MoffatTutor·
try another browser or device,
The lectures are hosted on YouTube. if you can’t access YouTube, you need to use a VPN,
F
Fatema·
I am planning to do the September 2023 exam. are the lectures still applicable or not?
J
John MoffatTutor·
They are all still applicable. There is one small addition to the syllabus for the September exam but it does not involve calculations (and our notes will be updated for it immediately after the June exams). However everything in our current lectures and notes remains examinable :-)
S
Shokhrukh·
Thank you
S
saede·
hi sir,
can I still use the exam kit 21-22 for June 2023? I don't have access to the new version.
J
John MoffatTutor·
Yes, although it would obviously be better to use the current edition (they sell an online copy of it).
Y
yusuf·
good day sir,i didnt get the question in the video quite well,can you kindly snap a picture of the question
J
John MoffatTutor·
As is stated at the start of each lecture, the examples are all printed in the free lecture notes - you need to have the lecture notes with you when you watch the lectures!
S
Sok Kit·
Hello.
I am planning to do the June 2023 exam. So are the lectures still applicable?
S
Sok Kit·
Hello. I want to know whether these lectures are still applicable for June 2023 exam or not.
S
Salma·
Hello,
Just wanted to check if these PM lectures are applicable for March 2023 exam?
J
John MoffatTutor·
Yes they are :-)
Z
zohaib·
What are the expected changes in PM syllabus for Winter 2022 attempt?
J
John MoffatTutor·
The syllabus for the December 2022 exam is the same as for the September 2022 exam.
J
John MoffatTutor·
Ask in the Ask the Tutor Forum and not as a comment on a lecture.
M
minakshi·
Hello sir,can i use these lectures for june 2022 sitting?
J
John MoffatTutor·
Yes you can.
N
Ned·
Hello John.
I first passed the first three modules 3 years ago.
I've not actually been in a job where the content of those three modules was used on a regular basis.
I'm getting a vague memory of having looked at absorption rates before but is certainly not a good working memory.
Is it worth revising the first three ACCA module before coming back to this. Or there is there one specific one I need to go over?
Thankyou,
Ned
J
John MoffatTutor·
You shouldn't need to revise the earlier papers - I revise the relevant areas in the Paper PM lectures.
V
vivek·
Can I use June 2019 books for preparation?
J
John MoffatTutor·
It would be better to get new ones because there have been changes to the syllabus. However if you are watching our free lectures then you do not really need a Study Text because the lectures are a complete free course. The essential book is the Revision Kit, but again it would be best to use a current edition of it.
F
Fatima·
Is there's any change on PM NOTES for the period (Sep 2020 - June 2021), that I have to consider when I study for the exam in Sep 2021.
J
John MoffatTutor·
Nothing has been removed from the syllabus. More has been added on Big Data. Correlation and regression and Time series analysis are now specifically included in the syllabus (before they were just assumed knowledge from Paper MA). A section has been added emphasising the importance of being familiar with the computer based exam software.
I
ishamadhani·
Good Evening Sir
Is it possible to self-study Performance Management in 1 month and be exam-ready? I was thinking to start studying for performance management from 1st August, after finishing my FA exam. Would it be possible to entirely finish the syllabus and appear for the September exams?
J
John MoffatTutor·
It is impossible for me to answer, because it depends on how much time you have available for studying each day and how easy or difficult you find the topics. It is also essential that you have a Revision Kit from one of the ACCA Approved Publishers and that you leave some time after finishing studying so as to attempt all the questions in the Kit. Question practice is vital to passing the exam.
S
siddra·
Hi, can I use this for the September 2021 or December 2021 sitting? Thankyou
J
John MoffatTutor·
Yes. Nothing is being removed from the current syllabus :-)
D
daisy·
please I am writing the june pm paper. i want to ask if this pm lectures is that of june 2021 and also how do i get access to the note
J
John MoffatTutor·
Our lectures are always kept up-to-date for the current syllabus and the June 2021 exam is on the current syllabus!
You can find links to all our free resources for Paper PM on the main Paper PM page of this website: https://opentuition.com/acca/pm/
M
Mohammed·
Good evening,
I am a new student on open tuition, I just would like to ask whether I can use these lectures and notes for September 2021? Because September is just 3 months far from June 2021.
Appreciate your answer.
J
John MoffatTutor·
Yes you can. The syllabus for exams after June has the addition of regression and time series calculations (which are revision from Paper MA) - lectures on these will be added soon. None of the current topics have been removed from the syllabus and so everything in the current lectures is valid for the September exams.
D
deeksha·
Hi sir,
first of all, I want to thank you for providing this platform and helping us students in the best possible manner.
I have one question if I plan to write the exam in Sept 2021 and the institute revises the contents after June 2021 as you have mentioned in several comments, will there be major changes?
J
John MoffatTutor·
In future please ask this kind of question in the Ask the Tutor Forum rather than as a comment on a lecture.
The syllabus for the September 2021 exam is already on the ACCA website, and the only addition is the inclusion of calculations on correlation and regression, and time series analysis - both of these are already examined in Paper MA and included in our Paper MA lectures. They will be added to our Paper PM lectures shortly.
I
Ibrahim·
Dear John,
How are you?
I hope you are doing well,
Actually sir i would like to ask questions but iam no longer able to post my questions in Ask ACCA tutor fourms due to technical problem and i had asked technical team for help and i sent so many emails regarding this matter but actually but actually no response from their side could you suggest me what i have to do please.
Thanks and regards.
J
John MoffatTutor·
But you posted a question in the Paper FR Ask the Tutor Forum only a few days ago (saying that you couldn't post there, but you did!!)
https://opentuition.com/topic/fundamental-standards/
I
Ibrahim·
Actually Sir, I just can do reply for my old questions that I have already asked before but iam still no longer able to ask about new title like I have sit for PM5 exams now iam studying FR7 but iam not able to ask about new titles just I can do commenting on lectures and replying for my old questions.
Could you help me please.
O
opentuition_teamAdmin·
check your email spam folder for the replies
Z
Zandile·
Hello! The way you have explained this has helped me so much. I am so happy I found this and I am now excited to see where the module takes me!
P
Phumzile·
Good day Sir, just stated studying for March exams.
J
jijo·
Sir I just came back to say thank you for all the help you've provided through these videos and notes and the ask the tutor forum.I passed the exam and am very grateful to opentuition and the help you gave .Thank you very much
J
John MoffatTutor·
Thank you for your comment, and many congratulations on passing the exam :-)
A
Akhil·
it was helpful .thank you for helping us
J
John MoffatTutor·
Thank you for your comment :-)
J
John MoffatTutor·
You are not required to study from any texts. However it is important to get a Revision Kit from one of the ACCA Approved Publishers because it is full of past exam and other exam standard questions for practice, and practice is vital to passing the exam.
J
John MoffatTutor·
You are welcome :-)
S
skhan143·
Good day everyone!
Can i use these lectures + notes for my March 2021 sitting?
Kindly advise.
J
John MoffatTutor·
Yes - the syllabus will not be reviewed again by the ACCA until after the June 2021 sitting.
M
Mr. Aboukar·
Hello John
A company is changing its costing system from traditional absorption costing based on labour hours to Activity Based Costing. It has overheads of $156,000 which are related to taking material deliveries.
The delivery information about each product is below.
Total units required of product X;1,000 Y; 2,000 Z;3,000
Delivery size X; 200 Y; 400 Z;1,000
Total labour costs are $360,000 for 45,000 hours.
Each unit of each product takes the same number of direct hours.
Assuming that the company uses the number of deliveries as its cost driver, what is the increase or decrease in unit costs for Z arising from the change from Absorption Costing to Activity Based Costing?
..A.. Decrease of $14 per unit
..B.. Increase of $14 per unit
..C.. Decrease of $30 per unit
..D.. Increase of $30 per unit
ANSWER FROM THE KIT
CORRECT ANSWER IS A
Absorption costing
Since the time per unit is the same for each product, the overheads per unit will also be the same.
$156,000 ÷ 6,000 units = $26
Activity based costing Number of deliveries for X (1,000/200)= 5
Number of deliveries for Y (2,000/400)= 5
Number of deliveries for Z (3,000/1,000) = 3
Total = 13
Cost per delivery = $156,000/13 = $12,000
Cost per unit of Z = ($12,000/3,000 units) × 3 deliveries = $12
my question is about the absorption cost per unit.
here is my answer
Absorption cost per unit= BA/BO = 156000÷45000 hours = $3.46 i used total hours as a base.
and here is how kit answered;
$156,000 ÷ 6,000 units = $26
i don't understand why he took a total number of production as base to compute overhead adsorption rate.
i would like to tank to you in advance john.
I
Irfan·
Dear As i Understand from The questing is that absorption base use by the company as previous the number of deliveries. as mention in question
"It has overheads of $156,000 which are related to taking material deliveries."
so the total of deliveries: X;1,000 Y; 2,000 Z;3,000 = 6,000
$156,000/6,000 = $26
hope i answer it right. :)
H
hafifi77·
Hi sir,
Can I use these lectures for September 2020 exams, if not when will the lectures be updated for September 2020
The books of bpp and kaplan available in the market are upto June 2020
Do you have any idea when the updated books for September 2020 will be available.
J
John MoffatTutor·
The lectures are valid for the September exams (the syllabus changes are minor and are already covered in the lectures).
I do not know when new Kaplan and BPP books will be available, but again the syllabus changes are minor.
Z
ZulmaSupporter·
Thank you SO much for replying I had the same question.
H
heerthiga·
Hi Louwqi,
Hope you doing great, may I please have your PM revision kit and pocket note if it's still available.
You will be better posting it in the forum for buying and selling accountancy books :-)
J
John MoffatTutor·
When you have problems with a question then ask in the Ask the Tutor Forum and I will help.
K
Kaviya·
Hi sir ,
Can i use the BPP revision kit june 2019 for the March 2020 exam ?
B
brochamp·
Assalam o alikum Sir, how are you? First of all thank you very much for such nice and clear lectures. Sorry i have not yet listen to these PM lectures but watched Management Accounting lectures and that was really great!. Sorry for this long message. i want to ask that if I don't buy any study material and just read Opentuition notes, is it enough for me or i should buy any other study material?
J
John MoffatTutor·
In future please ask this sort of question in the Ask the Tutor Forum, and not as a comment on a lecture :-)
If you watch my free lectures together with the lecture notes, then you do not really need a Study Text.
However it is vital that you buy a Revision Kit from one of the ACCA approved publishers. They are full of past exam and other exam-standard questions for practice, and practice is essential for passing the exam.
D
darshni1·
Hi Sir,
Can i use these lectures for March 2020 exams?
J
John MoffatTutor·
Yes, of course - they are up-to-date for the current syllabus and the syllabus will not be revived until September 2020 :-)
D
darshni1·
Thank you, sir.
J
John MoffatTutor·
You are welcome :-)
P
puneetprajapati·
Hi
Your's lectures is very helpful,
Which study text , i should buy BPP or Kaplan..?
J
John MoffatTutor·
If you are watching all the lectures then you do not really need a Study Text, but if you do buy one then BPP and Kaplan are both ACCA approved publishers and both are good.(If you click on the link ono the right hand side of this page then you can get a 20% discount from BPP).
What is more important is that you buy a Revision Kit. That contains lots of past exam and other exam standard questions for practice, and practice is vital to passing the exam.
J
John MoffatTutor·
They cannot be downloaded - they are only to be watched online.
M
mami9561·
Thanks a lot....... GREATLY APPRECIATED.
J
John MoffatTutor·
Thank you for you comment :-)
N
nwaleed·
hi sir could u please provide script for your lectures
J
John MoffatTutor·
There is no script (but you can obviously download the free lecture notes that go with the lectures).
H
heyhi·
Hello, John! It's nice to meet you again since F3 =)
C
cinha·
Hi there
I´m new on the site... and I have a question :do we have the material to read together with the video?
J
John MoffatTutor·
cinha: Yes - you can download the free lectures notes by going to the main PM page (the link is at the top of this page) and then filling the link on that page.
J
John MoffatTutor·
yousufkarai: Yes, of course - we always ensure that our lectures are up-to-date for the upcoming exams.
There are some syllabus additions from September onwards, but these are not substantial. All the current lectures are applicable for June, September and December exams, but some additional lectures will be added later for the September and December exams.
Y
yousufkarai·
Hi sir ,
Are these lectures applicable for the upcoming June and December testing windows?
K
kghali·
Hello there.
Are these lectures applicable for the coming June exam?
Thanks
A
aminxoja·
Hi there
Thank you John for the lectures.
Could you please set the Course Notes on background.
That would be very helpful.
Thank you very much!
Best wishes,
Muhammad Amin
A
ahsanbajwa·
Thank you John! Today I have passed this exam. It is all because of your effective way of conveying knowledge, which truly reflects your sincerity with teaching profession. Thank you once again, stay blessed!
Best regards
Ahsan from Pakistan
J
John MoffatTutor·
Many congratulations, and thank you for your comment :-)
A
aaa949·
Hi,
Congratz
May I ask you how did you study for the exam?
Regards
T
Tashwita·
Hii Sir,
I am really really grateful to you .....you are such an inspiration and awesome teacher who has made my concepts clear i today passed my F5 with 60 marks ... thankyou so much sir ! I owe them to you since i based my whole studies on your lectures and prepared the exam in 14 days.
J
John MoffatTutor·
Thank you for your comment, and many congratulations on passing :-)
A
alie2018·
Thanks John. Are you trying to say that traditional absorption costing absorb overheads in an arbitrary way thereby producing inaccurate product cost and distorted profit figures?
Thank you for every thing .
What are the other recourses that we may need to pass the exam
Do we need to know regression for this exam? I don't think you mention it in the lectures but it is in the formulae sheet.
Hello. I want to know whether these lectures are still applicable for Dec 2025 exam or not.
Just wondering if these lectures are still applicable for the September 2025 exam?
Thanks.
Thank you
Just wondering if these lectures are still applicable for the June 2024 exam?
Thanks.
Thanks very much for the response. Keep up the great work.
Thank you
lectures are hosted on YouTube. if you can't access YouTube, you need to use VPN,
Our free lectures and the lecture notes that go with them cover everything needed for each of the exams. However you do also need to do lots of question practice using a Revision Kit - practice at past exam questions is essential.
The lectures are hosted on YouTube. if you can’t access YouTube, you need to use a VPN,
can I still use the exam kit 21-22 for June 2023? I don't have access to the new version.
I am planning to do the June 2023 exam. So are the lectures still applicable?
Just wanted to check if these PM lectures are applicable for March 2023 exam?
I first passed the first three modules 3 years ago.
I've not actually been in a job where the content of those three modules was used on a regular basis.
I'm getting a vague memory of having looked at absorption rates before but is certainly not a good working memory.
Is it worth revising the first three ACCA module before coming back to this. Or there is there one specific one I need to go over?
Thankyou,
Ned
Is it possible to self-study Performance Management in 1 month and be exam-ready? I was thinking to start studying for performance management from 1st August, after finishing my FA exam. Would it be possible to entirely finish the syllabus and appear for the September exams?
You can find links to all our free resources for Paper PM on the main Paper PM page of this website: https://opentuition.com/acca/pm/
I am a new student on open tuition, I just would like to ask whether I can use these lectures and notes for September 2021? Because September is just 3 months far from June 2021.
Appreciate your answer.
first of all, I want to thank you for providing this platform and helping us students in the best possible manner.
I have one question if I plan to write the exam in Sept 2021 and the institute revises the contents after June 2021 as you have mentioned in several comments, will there be major changes?
The syllabus for the September 2021 exam is already on the ACCA website, and the only addition is the inclusion of calculations on correlation and regression, and time series analysis - both of these are already examined in Paper MA and included in our Paper MA lectures. They will be added to our Paper PM lectures shortly.
How are you?
I hope you are doing well,
Actually sir i would like to ask questions but iam no longer able to post my questions in Ask ACCA tutor fourms due to technical problem and i had asked technical team for help and i sent so many emails regarding this matter but actually but actually no response from their side could you suggest me what i have to do please.
Thanks and regards.
https://opentuition.com/topic/fundamental-standards/
Could you help me please.
Can i use these lectures + notes for my March 2021 sitting?
Kindly advise.
A company is changing its costing system from traditional absorption costing based on labour hours to Activity Based Costing. It has overheads of $156,000 which are related to taking material deliveries.
The delivery information about each product is below.
Total units required of product X;1,000 Y; 2,000 Z;3,000
Delivery size X; 200 Y; 400 Z;1,000
Total labour costs are $360,000 for 45,000 hours.
Each unit of each product takes the same number of direct hours.
Assuming that the company uses the number of deliveries as its cost driver, what is the increase or decrease in unit costs for Z arising from the change from Absorption Costing to Activity Based Costing?
..A.. Decrease of $14 per unit
..B.. Increase of $14 per unit
..C.. Decrease of $30 per unit
..D.. Increase of $30 per unit
ANSWER FROM THE KIT
CORRECT ANSWER IS A
Absorption costing
Since the time per unit is the same for each product, the overheads per unit will also be the same.
$156,000 ÷ 6,000 units = $26
Activity based costing Number of deliveries for X (1,000/200)= 5
Number of deliveries for Y (2,000/400)= 5
Number of deliveries for Z (3,000/1,000) = 3
Total = 13
Cost per delivery = $156,000/13 = $12,000
Cost per unit of Z = ($12,000/3,000 units) × 3 deliveries = $12
Decrease = $26 – $12 = $14.
----------------------------------------------------------------------------------
my question is about the absorption cost per unit.
here is my answer
Absorption cost per unit= BA/BO = 156000÷45000 hours = $3.46 i used total hours as a base.
and here is how kit answered;
$156,000 ÷ 6,000 units = $26
i don't understand why he took a total number of production as base to compute overhead adsorption rate.
i would like to tank to you in advance john.
"It has overheads of $156,000 which are related to taking material deliveries."
so the total of deliveries: X;1,000 Y; 2,000 Z;3,000 = 6,000
$156,000/6,000 = $26
hope i answer it right. :)
Can I use these lectures for September 2020 exams, if not when will the lectures be updated for September 2020
The books of bpp and kaplan available in the market are upto June 2020
Do you have any idea when the updated books for September 2020 will be available.
I do not know when new Kaplan and BPP books will be available, but again the syllabus changes are minor.
Hope you doing great, may I please have your PM revision kit and pocket note if it's still available.
Please let me.
Thank you
Can i use the BPP revision kit june 2019 for the March 2020 exam ?
If you watch my free lectures together with the lecture notes, then you do not really need a Study Text.
However it is vital that you buy a Revision Kit from one of the ACCA approved publishers. They are full of past exam and other exam-standard questions for practice, and practice is essential for passing the exam.
Can i use these lectures for March 2020 exams?
Your's lectures is very helpful,
Which study text , i should buy BPP or Kaplan..?
What is more important is that you buy a Revision Kit. That contains lots of past exam and other exam standard questions for practice, and practice is vital to passing the exam.
I´m new on the site... and I have a question :do we have the material to read together with the video?
There are some syllabus additions from September onwards, but these are not substantial. All the current lectures are applicable for June, September and December exams, but some additional lectures will be added later for the September and December exams.
Are these lectures applicable for the upcoming June and December testing windows?
Are these lectures applicable for the coming June exam?
Thanks
Thank you John for the lectures.
Could you please set the Course Notes on background.
That would be very helpful.
Thank you very much!
Best wishes,
Muhammad Amin
Best regards
Ahsan from Pakistan
Congratz
May I ask you how did you study for the exam?
Regards
I am really really grateful to you .....you are such an inspiration and awesome teacher who has made my concepts clear i today passed my F5 with 60 marks ... thankyou so much sir ! I owe them to you since i based my whole studies on your lectures and prepared the exam in 14 days.