• Skip to primary navigation
  • Skip to main content
OpenTuition | ACCA | CIMA

OpenTuition | ACCA | CIMA

Free ACCA and CIMA on line courses | Free ACCA, CIMA, FIA Notes, Lectures, Tests and Forums

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Forums
  • Search
  • Register
  • Login
  • ACCA Performance Management:
  • PM Notes
  • PM Lectures
  • Practice Questions
  • PM Flashcards
  • Revision Lectures
  • PM Mock Exam
  • PM Forums
  • Ask the Tutor

PM Chapter 1 Questions Activity based costing

聽

Spread the word

Please spread the word so more students can benefit from our study materials.

Donate

If you have found OpenTuition useful, please donate



Reader Interactions

Comments

  1. LiyaJaison says

    December 9, 2020 at 1:01 pm

    Sir I could not understand the 3rd question answer how in other overhead the amount 115200 came?

    I did 230400/18*10= 128000

    Log in to Reply
    • John Moffat says

      December 9, 2020 at 2:44 pm

      We use the total hours for each product (not the hours per unit).
      So the total hours for P are 2,400 x 8 = 19,200, and for Q are 9,600 x 10 = 96,000. So in total 115,200 hours.

      (It is the same idea as in the example I work through in my free lecture.)

      Log in to Reply
      • LiyaJaison says

        December 10, 2020 at 10:37 am

        Okay sir. Got it
        And 1 more question Sir,
        In the first question after finding the cost per setup ,i.e., $1000
        Next step can’t we do $1000/ 1000 units?
        And get $1.00/unit as the answer?

      • dessalegn says

        January 18, 2021 at 5:29 pm

        hi.i can’t see the question I have only see the comments

  2. pavan96 says

    November 26, 2020 at 3:22 pm

    I don’t have any questions but want to thank you for your goodness towards students

    Please suggest me the best revision book

    Thanks

    Log in to Reply
    • John Moffat says

      November 26, 2020 at 4:10 pm

      Thank you for your comment.
      BPP and Kaplan are the ACCA Approved Publishers and their books are both as good as each other. I myself have the BPP Revision Kit (and you can get a 20% discount from BPP if you click on the BPP link that is on most of the pages on our website).

      Log in to Reply
  3. Chamijcl says

    November 5, 2020 at 3:57 pm

    I calculated ‘Q’ unit cost correctly. But has given ‘P’ unit cost to answer.

    Thank you Sir

    Log in to Reply
    • John Moffat says

      November 5, 2020 at 4:22 pm

      I assume that you are referring to question 3.

      The question asks for overhead the cost per unit of Q, and the correct answer is the overhead cost for Q which is $46.25.

      Log in to Reply
  4. mithekiller says

    October 19, 2020 at 6:09 am

    sir “number of inspection during production” is a bit confusing because it might refer to both “the number of inspection during the whole production” in which case total inspection will be 8 (3 + 5) but if it is assumed that “the number of inspection during each of the production run” which i did, the total inspections would be 110 (13*5+15*3). my question is how do we avoid these confusions because in some other instances if you dont assume the answer turns out wrong.

    Log in to Reply
    • John Moffat says

      October 19, 2020 at 7:12 am

      The cost is the total cost of all inspections and therefore the number of inspections needed is the total number.

      Did you not watch my free lectures before attempting the test?

      Log in to Reply
      • mithekiller says

        October 19, 2020 at 8:20 am

        i did watch the lecture before attempting the test, but i found the wording of the question a bit confusing. to state it simply how do we know the inspections are for the whole production and not for the individual production runs?

      • John Moffat says

        October 19, 2020 at 8:39 am

        If it was as you were thinking then it would have said “number of inspections per production run”. The fact it says number of inspections during production means the whole production (not per run) 馃檪

    • John Moffat says

      October 19, 2020 at 12:17 pm

      I do understand that sometimes the wording can confuse (especially when reading quickly because of the time pressure in the exam) but there is no rule I can give you as regards avoiding the confusion – it depends on the wording (this was a past exam question). Here, as I wrote before, it would have said production run if it was meaning the number of inspections per production run (and to have 5 inspections in each production run would seem rather unlikely anyway 馃檪 )

      Log in to Reply
      • mithekiller says

        October 20, 2020 at 2:52 pm

        i got my answer. Thank you sir

  5. ramishasaleem says

    September 24, 2020 at 10:35 am

    in the last question it says which of the following is not an advantage of ABC, although all accept for 3rd are advantages but 3rd is a disadvantage.
    when it says ”not an advantage” doesn’t necessarily mean that it would be a disadvantage.
    in short the third option is a disadvantage

    it is possible that if something is ”not an advantage” it may not be a disadvantage either.

    Log in to Reply
    • John Moffat says

      September 24, 2020 at 12:42 pm

      I assume that you are referring to the choice “it can lead to a reduction in total overheads” (which will not also appear as the third choice because the software deliberately changes the order).

      If it is this statement that you are referring to, then it is certainly not a disadvantage. It is the main advantage of using ABC as I explain in my free lectures on this.

      The correct answer is that “it may be impossible to allocate all overheads to specific activities” because it is a fact and is certainly not an advantage.

      Log in to Reply
  6. Malvi210 says

    August 24, 2020 at 7:32 am

    Hello,

    For the first question, while calculating the total cost for product X why is 20000 divided by 1000?
    Also I am confused witht the second question, can someone please explain why both the statements are right?

    Log in to Reply
    • nomanashraf997@gmail.com says

      August 24, 2020 at 11:29 am

      Malvi210, Keep one thing in your mind that when there is word batches in question then you must have to find number of batches. In this case, we will find number of batches by dividing 20000 with 1000.

      Log in to Reply
      • John Moffat says

        August 24, 2020 at 3:21 pm

        What nomanashaf has written is correct for the first question.

        As far as the second question is concerned, statement 2 is the definition of a cost driver as I explain in my free lectures on ABC.

        Statement 1 is best explained by looking back at the example in the notes that I work through in my lecture. Product C is a much lower volume than the other 2 products. Using traditional absorption the overheads are $2.84 per hour whereas with ABC the overheads are $8.63. I do explain in the lecture why this has happened.

  7. Francis007 says

    August 18, 2020 at 4:13 pm

    Thanks so much. The tutorial has been extremely helpful.

    Log in to Reply
    • John Moffat says

      August 19, 2020 at 6:16 am

      Thank you for your comment 馃檪

      Log in to Reply
  8. PetrKupka says

    August 18, 2020 at 12:01 pm

    Hi everyone,
    I am quite confused with the solutions in the task with products P and Q. In the feedback, you arrived to 46.25 (the same as I indicated as a correct answer, but it was marked as wrong answer, saying that the correct answer is 140.64. I am bit confused. Thank you in advance for clarifications!

    Log in to Reply
    • John Moffat says

      August 18, 2020 at 3:58 pm

      I am puzzled because I have just checked the test again and it is marking 46.25 as being the correct answer.

      Try reloading the page and trying the question again.

      Log in to Reply
      • tanatswajc says

        August 31, 2020 at 5:24 pm

        Hie
        Could you please explain to me how you allocated other overheads on that question?

      • John Moffat says

        September 1, 2020 at 7:58 am

        They have been absorbed on the basis of the labour hours.

« Older Comments

Leave a Reply Cancel reply

You must be logged in to post a comment.

Copyright © 2021 路 Support 路 Contact 路 Advertising 路 OpenLicense 路 About 路 Sitemap 路 Comments 路 Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy 路 Cookie Policy