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June 29, 2020 at 9:56 am
Dear John, Thank you so much for your appreciated time.
John Moffat says
June 29, 2020 at 2:32 pm
Thank you for your comment 🙂
March 10, 2020 at 9:56 am
Hello Mr. John, thanks for the lecture on Make and Buy decisions. I have a query w.r.t. to comparison of Specific Fixed Cost saving that we need to take under consideration.
In case we have already established savings per limiting factor for making the product in-house, will we consider the specific fixed cost savings that also play its part in deciding the outsourcing decision? As in, if we may save 2 per unit for 2000 units, so saving is +4000 but the specific fixed costs can be -5000 for making it in house.
For a line of products being questioned with limiting factor, do we have to consider specific FC as well? If mentioned.
February 8, 2020 at 12:57 pm
Thank you for the great lecture.
February 8, 2020 at 1:38 pm
November 26, 2019 at 2:39 pm
Firstly, thanks for the informative lectures – truly helpful. I wanted to ask if we will be tested on Joint Product Costing syllabus in F5 exam? I see some questions in the revision kit pertaining to that topic.
November 26, 2019 at 4:34 pm
It is no longer F5 – it is Paper PM 🙂
In theory anything from Paper MA (was F2) can be examined in Paper PM, and this includes joint costs (which are a Paper MA topic). However it is very unlikely to be examined in Paper PM (from memory it was only tested once as a small part of a question, and this was several years ago).
November 28, 2019 at 8:49 am
November 28, 2019 at 9:05 am
You are welcome 🙂
August 17, 2019 at 7:02 pm
Thank you very much John. I am so sorry but I did not understand in the example 2, in the note 3, why do we ignore general overheads of $3,000. Could you please explain one more time here.
Many thanks in advance
August 18, 2019 at 9:31 am
Because the 3,000 is just an apportionment of existing overheads – that means that whatever the existing total overheads are, then have been shared between projects for accounting purposes. With or without the new contract, the total overheads will stay the same (we will just share them differently) and therefore there is no extra cost involved.
June 25, 2019 at 7:08 am
Could you please display the problems that u discuss in the video on the screen?
August 18, 2019 at 9:29 am
The examples are all in the free course notes that you can download and print out yourself.
April 19, 2019 at 8:49 pm
Just would like to confirm my understanding from video, Assume that can be sold for more than both our coast of making and the cost of buying them. Says that X product buy from others, $13 per unit, if we can sell $12 outside, better going not to do. Is it correct? Thanks. May.
April 20, 2019 at 8:54 am
That is correct 🙂
October 31, 2018 at 9:00 am
Thanks John. Well understood Sir. This is a make or buy with a limiting factor and so the best course of action as you explained is to simply find the saving per unit of the scarce resource for each product and rank in that order. Once that has been established then we can allocate the limited resource . Any unsatisfied demand can be met by buying from the outside supplier.
Actually it is economical to make all three products in-house as the variable cost to make is less than the buy in price. But due to the limited kg of material B we can make all of Y (2,500 units), but only 3000 units of Z instead of 4,000 units using the balance kgs of material B after making Y. The balance 1,000 units (4,000-3,000) of Z can be satisfied from the outside supplier. Likewise the demand for X of 2,000 units can be satisfied from buying in. However, the cheapest per kg to buy in is Product X, next Z and finally Y (but we are already fine with Y).
August 31, 2018 at 1:28 pm
I am so sorry but I couldn’t hear very well the last part of the video where you explained the assumptions. Can you please explain here.
August 31, 2018 at 2:59 pm
Sorry, but no. Turn up the volume on your computer and/or adjust the volume slider on the video.
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