[elle]

Tx

[elle]

Thank you kindly John

[elle]

Hi John

The revaluation reserve is 3000 + 1000
How have they calculated this?

[elle]

Hi John

Typo in book. Thank you kindly ?

[elle]

Lol sorry I meant interest received credited. Thank you John you’re explanations are extremely well put 🙂

[elle]

Oh i see that makes sense. And thank you I have watched your lecture. 🙂

[elle]

Oh I see thank you My mistake was in assuming that cash would’ve been debited if the plant asset was credited. Instead cash was correctly credited. Thank you John 🙂

[elle]

Hi
The interest received was credited to the bank account only. Can we thus assume the suspense account was debited here? Because double entry rule. So to correct this we debit suspense and credit interest received as you stated. Is my assumption correct?

[elle]

Thank you ?

[elle]

Hi please help?

[elle]

Thank you John!! 🙂

[elle]

Hi John

It is the definition in F2 BPP study guide. I will use purchases thank you and ignore the Closing inventory deductions so it’s always the same variance. Thank you for your advice 🙂

[elle]

I agree. It is always valued at standard cost. 🙂
I’m looking at the definition “The direct material price variance is the difference between the standard cost and the actual cost for the actual quantity of material used or purchased.”
Actual quantity of material used (5000) or purchased (6000)

I think what they are getting at is – When Closing Inventory is valued at actual cost (3.10), then variance is calculated on production (5000) as follows:
a) Production at standard cost 5,000 x $3 = $15,000 vs Actual purchases $15,500
The Variance is $500.
vs

If Closing Inventory is valued at standard cost $3, then variance is calculated on purchases (6000) as follows:
b) Purchases at standard cost 6,000 x $3 = $18,000 vs Actual purchases $18,600
The variance is $600.

So the difference is the Closing inventory.
So how do we determine which one to use? Your lecture is very helpful thank you.
Only it doesn’t cover the above theories a) and b).

[elle]

John, ever tried to watch a video three seconds at a time? 🙂 I’ve got the slowest internet in the world
Thank you salwa1234 and dcducaale

[elle]

Genius! Thanks a mill

[elle]

Hi John,

I have been struggling with this question for some time as well. I have done a lot of research online trying to get a better understanding. Unsuccessful unfortunately. (I study BPP). Would you kindly explain this concept? ROCE is only mentioned in our study guide as the formula. I don’t understand the question and how ROCE relates to efficiency. Please help.

[elle]

So the 13000 is actually $13000 and not 13000 hours.
And job 2’s chargeable hours are $12600 because of typo $2600.
In summary:

An advertising agency uses job costing and recovers overheads on chargeable hours. Jobs for thee accounts were worked on in Month 4 as follows:

Job 1 Job 2 Job 3
Opening WIP 7000 9000 6000
Direct materials etc 1750 0 2400
Chargeable hours 13000 12600 9400

Both budgeted and actual overheads were $70000.
Jobs 1 and 3 were incomplete at the end of the month 4. What was the value of WIP at the end of month 4?

Total Chargeable hours are (13000+12600+9400)= 35,000
overhead recovered for Job 1 = 13000/35000 * 70000= $26,000 or 13000 x $2
Job 2= 12600/35000 * 70000= $25,200 or 12600 x 2
job 3= 9400/35000 * 70000= $18,800 or 9400 x 2

Job 1: 7000 + 1750 + 26000 +13000 = 47,750
Job 3: 6000 + 2400 + 18800 + 9400 = 36,600
Total 84350 (Option B)

Haze and oruchei you two are geniuses Thanks!! God bless

[elle]

Total cost = Fixed cost + Variable cost per unit x Units
And Contribution = Sales – Variable costs or Sales (100%) = Contribution + Variable costs. Since contribution to sales is 30%, contribution is 30% of sales.
The Variable costs must then be 70% of sales.
$35 is Variable cost per unit. And Variable costs = 70% of sales.
Thus $35 = 70%
and Sales (100%) = 35/70 x 100 = $50 per unit. Thus contribution is $15 per unit.

BEP = Fixed costs / Contribution
Thus 525000 / 15 = 35,000 units.

This question and answer is in ACCA’s examiner report June 2010.

[elle]

Great Thanks!

[elle]

Hi

This is my calculation as well
Only I think you meant +26320 instead of 9400
(Job 1 = $7000+1750+36400) + (Job 3= $6000 + $2400+ $9400) = $62950

(Job 1 = $7000+1750+36400) + (Job 3= $6000 + $2400+ $26320) = $79870

The multiple choice options are
A $80 000
B $84 350
C $86 650
D $90 000

[Author]

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