In question 2, this confused sue to the explanation in the lecture that stipulates that the FC is treated as a period cost for marginal costing. Therefore the profits should be lower for marginal costing and not higher as calculated in this example. Would it be possible to clarify?
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Keaobaka Martha Thebe·
Wow! I'm really enjoying the services of this phenomenal lecturer! Thanks to him I think I will be able to nail this!
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sharves·
no, because when total factory cost increases: the conversion cost per hour increases(cost per factory hour);since TA ratio = Contribution (sales less material cost only) per hour/Conversion cost per hour (or cost per factory hour) .The impact would be reducing of TPAR
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Cath - CIMA Tutor·
Hi - yes - Im sorry - you are correct Q2 should be answer d) Alpha, Gamma, Beta.
Ill get this changed asap.
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jhanzebk·
I think the answer given is wrong the correct answer should be alpha gamma and betta
Ill get this changed asap.