Forum Replies Created
- Posts
@mika84 said:
Can anyone explain, in Q31 was it possible to calculate operational and planning variances given that we had only actual metres and standard?as long as i remember we had revised costs and actual costs. based on the accountant not being able to work due to sick leave, the budget was not changed. so i worked on the basic variances using the standard budget (we were to use reverse theory where u find the std cost using the revised cost) and then compare it with actual cost. However majority people here have used planning and operational variance in that question so its a debate on what could be right.
@umer147 said:
Q-31 : according to me, we cannot calculate planning variances as standard cost data is not given. what you all did?there was revised std cost which was given and the original std cost which was not given(we were to calculate it and use it against the actual one).
@jammy109 said:
I saw this info as basically telling you, that you must use the original standard cost to calculate variances, and not the revised cost. I think this was put in, because with the recent examiner change since Sept16, they prefer you to use the original standard and not the revised standard when calculating variances. I could be wrong, but that’s how I understood the final paragraphThats exactly how i understood it
@jasv said:
how did you understand in the q32 actual incidence of fraud being below target? is that good or bad? they planned wrong, software is not good or what?fraud being low than target is deffo a good thing for the company
@rohvj said:
I had seen a similar question before in one of the practices I had done and the answer scheme needed both the operational and planning variances to be calculated and under discussion to evaluate production manager’s performance, it was important to point out that the planning variances existed because the standard cost card was not updated and as such the production manager should not be held responsible for the adverse planning variancesthis makes alot of sense now. ur probably right. i hope i do get some markes for basic variance and assesment i did though.. every mark counts right?
and i did 3 variances not jus two lol. hoping for the best.
@micksymooresy16 said:
I interpreted that to mean had he had a chance to adjust the standard cost card there would have been no revised (as the changes would be the standard if you get me) I think you guys are right thoughJust seems a lot of marks for 2 variances but acca love a trick 😉
if he would have had the chance to change the cost then that would have been the standard cost to compare with actual, that was the whole tricky part. thats why i saw no need of operational/planning variance. i calculated three variance and ‘assessed’ the production managers performance. i guess thats why the marks were more as you had to explain the variances too. dont know though? i might be wrong.
@passionate said:
ACCA is just cruel. Where do they get these mean examiners……the question that had these figures 10%, 9025 ,5%, 9783 what was it about by the way and what was the answeri was so confused about this too… but guessed the answer to be B $3000 something as my answer was closer to that. anyone else who managed to get an answer here?
@anano said:
I agree, I thought, accountant-related part was key part in question. I think revised budget means adjusted budget. Accountant was responsible to set new price and new quantity of material. Budget would be prepared with old standarts, because new standarts weren’t updated.
But everyone here has solved Q31 with planning and operational variances, so maybe I’m wrong.i agree, i didnt see any need of operational or planning variance here, we just had to recalculate the old budget costings (before it was changed) to compare it with actuals because the question said the accountant had not adjusted for the changes in the standard cost. meaning they werent revised. idk though. as per my understanding my mind never went to operational/planning variances in that question
i agree, i didnt see any need of operational or planning variance here, we just had to recalculate the old budget costings (before it was changed) to compare it with actuals because the question said the accountant had not adjusted for the changes in the standard cost. meaning they werent revised. idk though. as per my understanding my mind never went to operational/planning variances in that question
ohh that was worse of alll.. i couldnt find the answer to the first question! selling price of the equipment, had to guess it 🙁
the second one was okay i think.
i remember choosing option B cuz the rest were ways of increasing tpar – like increasing selling price, decreasing cost, decreasing expenditure – option b was increasing 1 more person for cutting i think. cant recall much though
Hi,
Huma i got 450 for necklace question but in whatsapp group theyre saying its wrong as bottleneck resources was only 2ppl for cutting.
my answers were like this:
– vc less in – decline stage(less items sold means less vc) – though now i feel that vc per unit would never change, only total vc would change)
– p/v chart – profit line
– variance qsn 300 F
– OH highest in total cost qsn – i selected 2 only
– environmental cost – 650(guessed)
– throughput one i got 1.4 and the other 2.0
– last balance scorecard i showed increase/decrease in percentage from actual/target and then commented how good or bad it was for the company. no idea if it was the correct way of doing it
– variance i just calculated material price/usage and labour efficiancyWhat i meant was how to understand the treatment of variances when ur given a budgeted profit or an actual profit to an absorption or marginal qsn. Thank u for ur wishes
Dear Mr Moffat,
In the solution to Chris’s qsn above he subtracted the actual 8500 from Budgeted Spend 8400 however i didnt understand why he didn’t multiply 900 *$10 which is the variable n fixed OH to get the budgeted expenditure. Instead he multiplied them separately as follows: Please explain.
( cuz since its OH ignore DM and DL & (900*4) +(800*6)
I watched the lectures thrice to solve this question however I get confused in the part where we have to count with fingers. Isn’t it suppoed to be 11years for the 2nd receipt (4-11yrs using the fingers for 8 years)?
I deducted 1-3yrs from 1-11yrs to get 4-11years. I’m so confused.
i just wanted a confirmation if one/both ways were okay since they give the same profit. Anyway thanks.
Sorry i meant when we are preparing the absorption costing statement for the particular month we take the cost of production as the material/labour/variable and fixed costs times the production units right (in this case it is 5800 units)? but in this qsn they are using the units sold (5200 units)
this is how calculated my answer:
$ $
Sales (5200 * $30) 156000cost of production:
Materials (5800*$6) 34800
Labour (5800*$7.50) 43500
Variable (5800*$2.50) 14500
Fixed OH (5800*$5.0) 29000
Less: closing stock (12600)
(5800-5200)*$21
(109200)
Gross profit 46800Amt absorbed: (5800* $5) 29000
Actual amt: (As per qsn) (27400)
Over absorption 1600
Net Profit $48400However the book calculated it as follows (P/S check the cost of production, the book uses 5200 units instead of 5800 units like in my calculation)
9.5 D
$ $
Sales (5,200 at $30) 156,000cost of production:
Materials (5,200 at $6) 31,200
Labour (5,200 at $7.50) 39,000
Variable overhead (5,200 at $2.50) 13,000
Total variable cost (83,200)
Fixed overhead ($5 ? 5,200) (26,000)
Over-absorbed overhead (W) 1,600
Absorption costing profit 48,400Working $
Overhead absorbed (5,800 ? $5) 29,000
Overhead incurred 27,400
Over-absorbed overhead 1,600Sorry for bothering you Sir but i need a clarification which way is correct.
Thank you 🙂
This is the qsn:
cost and selling price details for product z are as follows:
Direct material $ 6.00 per unit
Direct labour $ 7.50 per unit
Variable overhead $ 2.50 per unit
Fixed OAR $ 5.00 per unit
Profit $ 9.00 per unit
Selling Price $ 30.00 per unitBudgeted production for the month was 5000 units although the company managed to produce 5800 units, selling 5200 of them and incurring fixed OH costs of $27400.
What is the absorption costing profit for the month?
a) $45200 b) $46800
c) $45400 d) $48400My qsn is that in the answer they have used the units sold i.e 5200 to calculate the c.o.g.s in the statement where as in the lectures you have used the units produced. i dont understand why they used units sold instead of units produced like in the lectures
Also in the same qsn, to find the absorption costing profit we need to add/minus the over/under absorption however in this qsn they have only taken the gross profit as the answer. why?
