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Thank you sir, always grateful for your help, your answers are exactly what I need–relevant to the subject, which chatgpt can’t provide 🙂
Sir does this mean that the total fixed cost would remain the same and only the hours based on which the total fixed overhead is absorbed is increased (the denominator in calculating OAR is increased , but the numerator is the same)) and so it’ll decrease the OAR, but not the total fixed overhead?
So does this conclude that unless the Q. states that there is a step up fixed costs or the TOTAL fixed costs is increased somehow, we would assume there is no increase in fixed costs total because of the incease in volume, only the volume has increased, even though this increase in volume is more than the Normal capacity?
Please just clarify this , then all my doubts regarding relevant fixed costs will be cleared 🙂OHH I GOT IT NOW sir thank you so much for explaining!!! whenever I’m in stress while solving questions you help me out !! I’m so grateful for your help !! thank you sm for your hard work!!! sir 😀 o7 (salute emoji)
Q. Kiran Co had the following balances in its statement of financial position as at 30 June 20X5 and 20X4:
20X5 20X4
Current liabilities: $ $Taxation payable 800 400
Dividends (declared before the year-end) 3300 2500
Non-current liabilities:
8% Loan notes 50,000 40,000
Equity 85,500 45.500
In the year ended 30 June 20X5, income tax of $550 was paid. The additional loan notes were issued on 30 June 20X5. What was Kiran Co’s profit before tax for the year ended 30 June 20X5?
>>Sorry sir, i typed the question again. Hope it is proper clear now i have typed everything given in the question. I am having difficulty finding the profit before tax using the cash flow related topics given as in this question.
Ohhh I get it now. I misunderstood what the question meant, I assumed it meant to reduce “by 2%” but it is actually “to 2%” 😀 Thankyou Sir for your help, I’m so relieved
How did we get 48%? the z score for 7.985kg is -0.75 and so the percentage between the mean and 7.985kg is 0.2734 (27.34%) and it says percentage of items too light is below 7.985kg so the way I worked is, the percentage for too light weight item is = 0.5 – 0.2734 and from this I’m getting 0.2266 for too light weight items. Please tell me what I am doing wrong in this part Sir. And yes Sir, I have watched all of your free lectures
OH okay I got what you were trying to say, you’re a lifesaver! thank you so much Sir for your help! 😀
But the ROI before the new investment (18%) is greater than the ROI of the new investment (17%). Doesnt that mean the profit is decreased, resulting in decrease in Residual Income too?
I am calculating the residual income before new investment as = ROI (18%) giving the profit and from this subtract the 15% of notional interest.
And after new investment as = ROCE (17%) providing a profit and from this profit subtracting (15%) of notional interest.And according to this, The residual income before interest should be greater right? so it is getting decreased not increased.
Please help me understand this part Sir 🙂