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I suffer same issue with MrsTaylor1.
And further issue with next question, it stated that “further updates of audit completion”, but I saw no update.
2 question takes me a lot of time, and I dont know what should I do with ACCA.Sorry I missed that key info 🙂
This has been examinsed in Mar June 20222.
Pls help meOh, I got it. Thank you so much.
Your explanation make it more simple than I thought.So, in case 1 project have more than 1 option (eg 5, 10 … options), we must take into account the value of each option, is it right?
Thanks, so can you tell me what’s wrong in my approach in determining the repayment of $21.89 each year?
In other words, my approach would bee similar to the approach to determine coupon rate in section b(i).
For all 2 sections, we have to determine the amount received each year.
– In section b(i), new bond with “unknown coupon rate”, as well as “unknown repayment”
– In section b(ii), new bond with “unknown repayment each year”So, please help me clarify the difference.
Please help revisit ACCA website, on the last line of answer for Question 1.d. I also copied for your review, I would remind you about the last sentence of this paragraph:
“The expected loss allowance should be increased to $356,825 with an expense recorded in profit or loss of $346,825 ($356,825 – $10,000). The loss allowance is deducted directly from the bonds with future interest income recorded on the gross position. The carrying amount of the bonds at 31 December 20X4 would be $9,953,175 ($10,300,000 – $346,825).”
Dear Admin, please help explain to me for further discussion about this question.
Thank you so much.
Hi Admin, related to this question, how can we conclude that using this license will bring future economic benefit to Chemclean, especially when Chemclean has not been confident theirself about future economic benefit of this license?
Any risk of CANNOT USE/SELL CHEMICAL COMPOUND IN THE FUTURE with the basis of information available, leading to the result of no future economic benefit will flow to the entity.
I searched on the google and found the answer.
The answer here is that 4 currency (AUD, EUR, GBP, NZD) used direct exchange rate, the other used indirect exchange rateIn your example, demand for exports from US to Euro increases when exchange rate increases.
BPP said: “In case of a HIGHER exchange rate, domestic goods are more expensive in foreign market so demand for exports FALLS”
I agree what you wrote is correct, and II think what BPP said is incorrect, or BPP has another way to metion “exchange rate”. (Maybe they suppose Exchange rate = how much foreign currency is equal to 1 domestic currency (GBP)).
Hope you know my point.
I understood your explanation, you mean that “In case of a higher exchange rate, domestic goods are more expensive in foreign market so demand for exports increase”
=> Argument in BPP text book is wrong when they said demand for exports falls.
Here is the full question
Robber Co manufactures control panels for burglar alarms, a very profitable product. Every product comes with a one year warranty offering free repairs if any faults arise in this period.
It currently produces and sells 80,000 units per annum, with production of them being restricted by the short supply of labour. Each control panel includes two main components – one key pad and one display screen. At present, Robber Co manufactures both of these components in-house. However, the company is currently considering
outsourcing the production of keypads and/or display screens. A newly established company based in Burgistan is keen to secure a place in the market, and has offered to supply the keypads for the equivalent of $4·10 per unit and the display screens for the equivalent of $4·30 per unit. This price has been guaranteed for two years.
The current total annual costs of producing the keypads and the display screens are:(Keypads; Display screens) respectively
Production (80,000; 80,000) unitsDirect materials (160; 116)
Direct labour (40; 60)
Heat and power costs (64; 88)
Machine costs (26; 30)
Depreciation and insurance costs (84; 96)
Total annual production costs (374; 390)Notes:
1. Materials costs for keypads are expected to increase by 5% in six months’ time; materials costs for display screens are only expected to increase by 2%, but with immediate effect.
2. Direct labour costs are purely variable and not expected to change over the next year.
3. Heat and power costs include an apportionment of the general factory overhead for heat and power as well as the costs of heat and power directly used for the production of keypads and display screens. The general apportionment included is calculated using 50% of the direct labour cost for each component and would be incurred irrespective of whether the components are manufactured in-house or not.
4. Machine costs are semi-variable; the variable element relates to set up costs, which are based upon the number of batches made. The keypads’ machine has fixed costs of $4,000 per annum and the display screens’ machine has fixed costs of $6,000 per annum. Whilst both components are currently made in batches of 500, this would need to change, with immediate effect, to batches of 400.
5. 60% of depreciation and insurance costs relate to an apportionment of the general factory depreciation and insurance costs; the remaining 40% is specific to the manufacture of keypads and display screens.Required:
(a) Advise Robber Co whether it should continue to manufacture the keypads and display screens in-house or whether it should outsource their manufacture to the supplier in Burgistan, assuming it continues to adopt a policy to limit manufacture and sales to 80,000 control panels in the coming year.From my view, I just think that
VC = $22k ~ batches of 500
So with the new batches of 400, VC should be = $22 * 400/ 500.As a result, I cannot understand the answer of ACCA.
The explain of BPP as follow:
“If the aim is to minimise costs, the solution is where the total cost line touching the feasible area at a tangent, is as close to the origin as possible as this will allow the company to make as little as possible given constraints. If the aim is to maximise profit, the solution is where the total contribution line touching the feasible area at a tangent, is as far away from the origin as possible as this will allow the company to make as much as possible given contraints.
Dear John, I cannot post anything to this sub forum as well as post my question.
Thank you for your reply, whether the relevant cost for 3 tonnes is the opportunity cost in this case.
It means that the relevant cost equal to the biggest value of althernative solutions comprised of selling the materials already held at $105 and purchasing other materials at $126.Am I understand right?
