Quantitative analysis in budgeting – Learning curves part 2 – ACCA Performance Management (PM)
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Hello Sir. For 4th unit, the effect will be r2. If it is for 8th unit, the effect will be r3. Right ?
Correct 馃檪
Hi John, would you please give an example on calculating learning rate for the 4th units please? e.g. the one in your last video. 100 for the first and 50 hrs for the 4th. what would be the learning rate?
Hello!
If we calculate learning rate as 84.375% it doesn’t work, 80* 84.375% is not 55 h.
Or do I not understand something?
Thanks in advance!
Best regards,
Victoria
I think I understood =)
Thanks!
I am pleased that you now understand.
Hello John please I wanted to ask that in the exam if we are asked questions on quantitative analysis in budgeting please how do we know that we are supposed to use High-Low method or Learning Curve. Will it be specified in the exam?
There is no connection between high-low and learning curves. They are completely different even though they are both quantitative techniques.
Maybe you are really asking about high-low and regression analysis, in which case it will be very clear which from the question.
I assume that you have a Revision Kit from one of the ACCA approved publishers (if not then it is vital you buy one). They are full of past exam and other exam-standard questions and so when you have practiced them all you will see how you will know what each question is testing you on.
Ok
Thank you very much
Hi John
Can I say we only can calculate the learning rate if the time given is the average time per unit?
Either that or there is enough information for you to be able to calculate the average time per unit.
Hello Mr. John, can you please explain the way in which we calculate the learning rate using the labour rate variances?
There is no special rule. You can use variances in the normal way to calculate the actual time taken, and then you can calculate the learning rate in the way that I show in the lectures on learning curves.
If you are referring to a specific question then say which one and I will then be able to explain better.
Direct labour $ 25 per hour
Month batches sold efficiency variance F\A
July 1 NIL
Aug 1 115 F
Sept 2 265 F
Oct 4 648 F
Nov 8 1056 F
Dec 16 1198 F
REQUIRED:
Calculation of learning rate and determination of the steady state.
Sorry, but this question as you have typed it could not be asked in Paper PM.
(In future please ask questions like this in the Ask the Tutor Forum and not as a comment on a lecture)
ok, Sir Thank you!
is anti logarithms and algebraic approach to logarithms tested ?? as you haven’t posted any video on it ..
it was there in the bpp text book.
Antilogarithms are not in the syllabus and are not examined.
In theory you could be asked to calculate ‘b’ using the log button on your calculator, but it has never been asked (you have always been given ‘b’ in exam questions).
Everything that can be asked is covered in my lectures.
Thank you.
Understood sir. Thanks
If the time for 1St – 100 hrs
The avg time for 4th – 50 hrs
Then the learning rate would be
100 x r2 = 50
r2 = 50/100
r2=0.50
r= square root of 0.50
Which is 0.7071 or 70.71%
Is that correct??
Yes – that is correct 馃檪
Absolutely right. Thanks
i understood everything up until the part where you used the example of 4 units to find the learning rate. can’t quite get it.
You will have to say which bit you did not get!
The doubling effect of using r2
You know rule right that if the cumulative profits doubles then the average time taken per unit will fall
so for making 2nd unit which is double of 1st unit it will be
taken as r.
for the 4th unit it would be r*r which would be R^2
we know that 100 * r^2=50
so r=root of 0.50
r=70.71%