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In continuation of the above, my purpose of asking this is in case of Rolling budget is that whether after Q1 stage whether actual Q1 replaces Q1 budget drafted earlier.
In continuation of above Shop Manager should not be held responsible for Planning Variance but he is very much responsible for Operational Variance.
Kindly guide whether this understanding is correct or wrong !
Dear Sir
I am from India and additional exam session in September is not going to take place in India but can I travel to Malesiya and appear their. Is it permitted !
Kindly advise
Deep
This is 2nd attempt and failed with 47 marks in P5. This is the last paper left for ACCA and feeling so low and dejected.
Those who passed could you suggest which is the best online tuition class or how they studied for the P5 Paper.
@tejot said:
Thank you John Sir, Mike Sir and the whole team of OT. I am an ACCA affiliate with following marks:
P2: 90
P4: 74
P2: 68I owe my success of completing Acca in three attempts (including 4 exemptions) solely due to God, opentuition and my hardwork
Congrats Tejot – Feel proud of you. I am also from India and failed P5 , in 2nd attempt. This is the only paper I need to pass to complete ACCA. Will you please share how you studied P5 !
Dear Sir
Is there any hope of lenient checking this time as pass rate for P5 has been noticeably low and paper this time was difficult one
DeepDear Sir
I have been asking is there any plan of ACCA to conduct resits after 3 months this Year. So that we can shrug off our depressed thoughts and brace again to face ACCA resit in September 2014. But is there any plan from ACCA for such resits. Kindly throw light if anyone has any idea about resits !
Deep
Question (b)
After considerable internal discussion concerning Quotation 2 by the management of SSA Group, Division A is not prepared to supply 18,000 ankle supports to Division B at any price lower than 30% below market price. All profits in Distalnd ( Division B) are subject to taxation at a rate of 20% . Division A pays tax in Nearland at a rate of 40% on all profits.
Advise the management of SSA Group whether the management of Division B should be directed to purchase the ankle supports from Division A or to purchase a similar product from local supplier at 9 per unit in distaland.Supporting calculations to be provideded ( 8 marks)Answer
Now there are 2 scenarios either
1)B should buy at 10.50 per unit from A or
2) B should buy at 9 per unit from Market in its own country
1)Option 1
Since tax rates in A’s country are at 40% and B’s country at 20% . It does not make sense for A to charge 10.50 per unit to B especially when the same quality product is available in B’s country at 9 per unit thereby allowing to make more profit to A and paying tax at 40% on it.
10.50 X 18000 units = 189,000 minus variable cost 126000= 63000 X 40% Tax =25200=Tax component
Division B after buying at 10.50 per unit will be making less profit ( and also notional loss of 9 per unit minus 10.50 per unit) as such reduced Tax liability
2)Option 2
Now Division B is buying at 9 per unit from market and then process and sell it to make profit in the market since final selling price is not given -tax liability of profit at 20% would certainly be lower.
A will not have not have any impact on profit – since B is buying from market.As such on the basis of this analogy – Option 2 of allowing B to buy from market makes sense and logical.
Now this answer DOES NOT MATCH with ACCA answer as far as CALCULATIONS PART is concerned. However my answer choice and ACCA answer choice of allowing B to buy from market GETS MATCHED.
Kindly advise as an EXPERT , will you give any consideration to my answer and whether it is acceptable.My further query on such questions is
1)Whether we should be worrying about tax components or
2)Profit after Tax ComponentsKindly give your comments on my answer and about 2 issues raised further.
Deep
Dear Sir
In this solution given by ACCA why they are comparing Division A Sales of 60,000 wrist supports. The question is whether Division B should buy from at adjusted Market price of 10.50 per unit or at local market rate of 9 per unit in distland.
I am unable to understand the answer,If Division B is buying from market at 9 per unit then why Sale of wrist units ( 60000 X 5 ) is to be considered that is 1st question and by buying at 9 per unit in market how come we should calculate tax at 20% on purchase price. This is really putting me under stress. Kindly explain.Dear Sir,
You have stated that Beyond Budgeting concept essentially states not to have Budgeting. However if one understands it correctly it states NOT TO HAVE Fixed budget drawn at particular point of time and then not factoring in subsequent changes happening.
As such Beyond Budgeting points out to have Flexible Budget and then scan all eventuality happening around and factor them in and then have Revised Revolving ( Rolling & Flexible) Budget , that’s called Beyond Budgeting concept.
Kindly correct me , If I am wrong.
Deepak
Dear Sir
4 a) Among divisions when deciding transfer prices the rational should be to promote internal efficiency as such transfer price based on standard cost is good indicator as compared to price based on actual cost, else there will not be any motivation for supplying division to control cost. By setting transfer price based on standard cost is an indication to supplying division that it has to control cost to that extent else it will have to bear the overstepped cost to its account and for a company as a whole it makes sense.
4c) Overall profit would be same as that is the profit earned from outside sell for the company as a whole. Transfer pricing mechanism should give fair opportunity and autonomy to internal divisions to show their performance depending on their stature i.e either as Cost Center or Profit Center.
This is what I feel , Expert Tutor would be able to fine tune this answer as I am also student like you.
Deepak
Dear Sir
I am talking about adjustment of Economic Depreciation to Capital ( not to profit). Could kindly throw some light on that.
ACCA December 2012 -P5 Paper
Dear Sir / Madam,
In continuation of same -Kindly peruse the EVA Problem in December 2012. There has NOT been consistency in according treatment in EVA Calculation.
ACCA Solution has rightly added back Accounting Depreciation to Profits and deducted Economic Depreciation from Profits. But literature on EVA clearly states that adjust value of Capital employed to reflect Economic Depreciation and NOT Accounting Depreciation. This has NOT been done to Capital figure in ACCA Solution.
Kindly explain whether we should be following ACCA solution without any adjustment as far as adjustment to Capital is concerned!
Dear Sir
I think this Import Tariff at 25% is creating skewed presentation. If we consider only 40% Tax and 50% Tax in Country A and Country B respectively by leaving out Import Tariff at 25%. It is going in favour of full transfer price – leaving maximum profit in Country A and saving profit from tax where tax rates are high 50% -in Country B.
But by taking this import tariff of 25% into account – then it makes a case for transfer at variable cost just to save Group from paying higher tariff on full transfer price.Kindly correct me, If I am wrong
Deepak
If you have got only one paper left either P4 or P5. Are we allowed to take both P4 and P5 so that chances of getting passed in one get increased ! is it allowed !
Dear Sir,
Thanks for quick and crystal clear answer . With due regard to you ,are you really sure about it as ACCA solved answers make frequent references of ISAs. BPP Book says if you quote ISA – half mark is yours. This I am writing out of anxiety and tension, Kindly dont take it otherwise.
Deep
