[HazE]

I can only speak for myself… I just gave F6 in March sitting with 28 days of prepration and to be honest i didnt thought i would be well prepared. But i passed it and passed it with some margin. So i will say go for it. All i would say is to really commit urself and do lots of actual question solving.

[HazE]

Thanks a lot. Appreciate that

[HazE]

Thanks and wish you the same and you are welcome as well. Goo luck

[HazE]

Had to start from FIA/CAT courses coz didnt have any accounting background, so started last year jan and completed 4 courses of FIA and 3 courses till F3. 7 in total so far and hoping to do another 8 this year.
And you are welcome. Glad it made sense

[HazE]

We are here because we want to help each other through this,so no need to say sorry.
Ok so like i said we will take 2000 from 25000 level of activity so that we are on the same level as of 15000 in terms of total cost(151500-2000=149500) and then apply high low method. So lets do that and we get
149500-94500/25000-15000=5.5 as variable cost per unit
Now we put this into 15000 level to get fixed cost so
5.5*15000=82500 which is total variable cost
94500-82500=12000 which is fixed cost

Now remember if 12000 is fixed cost for 15000 level and we know that step cost increase after every 10000, so that means at level of 5000 we have not incurred that step cost yet. (makes sense?) so we take 2000 out from 12000 to get fixed cost for activity level of 5000. Hope its clear now. But again just understand the logic behind it all and will make life easy.

[HazE]

for second one just think about it for a moment. it says for every 10000 the cost will increase by 2000.. so that means upto 9999 you will have one fixed cost and then from 10000 you will add 2000 to that fixed cost and then again at 20000 you will add another 2000.
For our activites per question, we can see that at 25000 level we already would have added 4000 in total in fixed costs and at 15000 we would have added 2000 to the fixed cost.. makes sense?
so if we take 2000 out from cost of 25000 we can then apply high low method and get the variable and fixed cost. Now the fixed cost that we will get we take 2000 out to get the fixed cost at 5000 level.
Hope you can work it out and understand the logic.

[HazE]

Stepped cost is fairly straight forward concept. Once you understand the principle you will see. For that i will say to go through the lecture on this topic.
For first question we use the high low method and all we have to do is to apply high low method after taking out the stepped cost which is 5 percent when the activity increases from 3500 onwards.
So from cost of 4000 we will take out 5 percent to give us 17825/1.05=16976
Now we can apply high low method using the cost at highest activity and the lowest one to give us unit variable cost which is 16976-10100/4000-2000=3.44 per unit
to get the fixed cost we can put this value of variable in any given activity BUT we will put it in 4000 because at that level the stepped cost has already been added into the total cost. IF we put it in the 2000 or 3000 level we will have to add back the stepped cost as well.
I hope you understand that so 3.44*4000=13752 and 17825-13752=4072 which is fixed cost.
apply those values in 3750 to get 3750*3.44=12900+4072=16972

[HazE]

For your First question i have answer as 16965
for second question the answer i got is 10000

[HazE]

Idle time is 20 percent. So that means total labour hours that you will pay will also include that 20% as well. It takes 5 hours to make one unit but that is only time that is spent on making it. You should also account for the time spent idle when you pay for your labour. To do that we first calculate the total hours required to make all units (4800*5) and that will give us 80 percent of hours that needs to be paid. So we divide it by 0.80 or multiply by 80%

Hope that makes sense.

[HazE]

Yeah sorry mate thats right x=96

[HazE]

The approach i can think to deal with this is algebraic one. So lets go Algebra on it
So first suppose
x= senior
y= junior

we are given that x is paid twice to that of y so that mean X=2Y
Also we know no. of hours for each so writing that in equation form we have
440x+1260y=102340
Now put value of x from first equation into second we have
440(2y)=1260y=102340
y=47.82
To get X simply put value of x in any equation, i will do in first one to get y=96 after rounding

[HazE]

Blanket overhead cost means that the same absorption rate will apply to all the different units or sections of an organization. Maybe i will clear it with an example. lets say there is a production company for cars that has an assembly and a finishing section. So when we talk about blanket absorption rate it will mean that the same OAR will apply to the whole factory (assembly and finishing) and when we say that normal absorption method is used it will mean that each assembly and finishing will have their own absorption rate based on total hours worked in each one of them
So blanket= total hours for whole factory normal= total hours for each section hence diff OAR for each section

[HazE]

Thank you very much and i really appreciate the time and effort you and your team put in here. All this is simply priceless. And now i have FA 2014 text and kit and will carry on the studies.
Again thank you sir

[HazE]

First of all thanks a lot for the prompt reply and also have to say i have been through 4 chapters so far and would like to thank you for amazing set of notes and video lectures. So easy to understand the calculations so far
And now for one last time let me just clear what i understand from your response. So you are suggesting to buy FA 2014 since the one i have right now are FA 2013 for both kit and text for BPP. Is that right? Also is there a lot of syllabus changes between those two?
Sorry to be asking it over again,just clearing it for one last time

Thanks and Appreciate all the help

[HazE]

Answer is 900000

you know the fixed cost and you know the revenue of sales to breakeven.
what you should know is that once your contribution from sales cover total fixed costs, you break even at that point. So if at 750,000 of sales we are breaking even that means that 300000 is the contribution out of 750000,,,, which means CS ratio is 300000/750000=0.4
now once we got CS ratio we can do it by two ways
one way is we can add total contribution we need to achieve our target which would be first 300000 so we break even and then 60000 so we generate that profit adding them both and divide it by cs ratio will give us the amount of revenue we need to generate

other way is that we divide the profit by CS ratio to see how much revenue we need to get to have that much profit and add the 750000 revenue to it. since we need to cover the fixed costs first and then generate profit

[HazE]

Answer Is 161,500
Work it one by one…
first is material and it says its totally variable so get the cost per unit for it 35000/10000=3.5
labour it says there is a fixed and a variable element to it..we know the fixed is 11000 and we can get variable by subtracting fixed from 43000 to get 32000 and per unit would be 32000/10000=3.2
lastly the overheads it says are fixed totally up to 20000 units so nothing changes there
Now we can work for the asked units which are 15000
so material 15000*3.5=
labour 15000*3.2 + the fixed 11000
overheads doesnt change since they are fixed 50000
add them up

[HazE]

Answer for this is B
Whats given is budgeted overheads for department which is not really needed in this solution. What else is given to us. It says production overheads were under absorbed by 9400 and actual overheads are 295,000. So it means that with overhead absorption rate the overheads that were actually absorbed would be 295000-9400 =285600. And to get the overhead rate we can divide this 285600 by machine hours worked 70000 and we will get our absorption rate

So basically we are trying to get the actual overhead absorbed figure so that we can divide that by the actual number of hours to get the absorption rate

[HazE]

Yeah the answer would be B. Couple things to notice here. One that it is a payable account and payables are liability. Liability increases when you credit them and decreases when you debit them. Other thing is that it is asking for a balance for october 20×0. and the T account given here is for the end period 30 sept 20×1. So basically asking you to work backwards and tell the starting figure.
Given is cash at bank which means that you paid some amount to your suppliers so thats credit to you cash account and debit enty here in payables. Also there are purchases done and again that should be a credit balance here in payables coz you have not paid for it yet and the corresponding debit entry could be in inventory account or purchase account.
now we have to figure the balance brought down if thats a debit balance or credit. Since it is a payable account i would start by thinking that its a credit balance so lets see.

DEBIT CREDIT
cash at bank 21600 balance brought down14000
Balancing figure 11900 purchases 19500

total 33500 total 33500

So as you can see that the balance brought down has to be a credit enty, You can work it like this and put it on the debit side and you will see that the balancing figure will be different and will not reconcile

[HazE]

Ok. So OAR is always calculated as budgeted overheads divided by budgeted units produced.
In this question they already told us that OAR is based on 220 000 units and we just have to work out the budgeted overhead.as the actual overhead is given already. Its pretty simple. It says the actual overheads were 1.000.000 and were over absorbed by 100.000.
Lets think about it for a second. If it is over absorbed that means that the actual overhead incurred is less then budgeted.So if 1,000,000 is actual and we add 100.000 to it we will get the budgeted overheads. Once we have budgeted overheads we will divide it by 220.000 and get the OAR. So.
1,000,000 + 100,000 =1,100,000/220,000= 5 per unit

you can check it or you can think about it this way for the purpose of understanding that you multiply 5 which is OAR with number of units to see how much of it is absorbed and in this case you multiply with 220000 and will get 1,100,000. which is clearly 100,000 more then the actual 1,000,000

[HazE]

If you go through the bookkeeping lecture and understand the basic concept of bookkeeping, then it will make sense the more you will practice.
And yes you can ask and i will try to answer it.

[HazE]

You might need to have a look at lectures to clear your concepts. This one seems to be pretty straight forwards.. Lets see

So since its a motor vehicle cost account, that would be an asset to the company. So asset increase when we debit them and they decrease when we credit them
In this particular problem it says that there was a brought down (b/d) balance of 150,500 so thats on the debit side and then there are additions of 12950, again thats adding to the account so if we are adding we will write it on the debit side. On the other hand disposal clearly means we are getting rid of some machinery so we write that on the credit side.
Now we will simply see what have been done over the course so we had 150500 already and we added 120950 to it so thats total of 271450 and also we got rid of some machine worth 85000 so that brings the balance to 186450. Now this 186450 is debit heavy meaning debit is more so that means we will carry it down to next accounting period and start that my saying the brought down debit balance is 186450. So your answer is D
Hope this helps and again i will say do watch lectures coz they will really help

[HazE]

1900 would be the answer. And you should state the right answer if you know it so the person who is trying to solve it is sure about the answer before he or she explains it to you
Thanks

The way i work it out is think about what the normal output would be if there wasnt any abnormal gain. Which clearly would have been 8000 minus 400 which gives us 7600. Now this 7600 is the output after 20 percent of normal loss so that means 7600/.80 will give us the output if there was no normal loss at all.. which is 9500
so subtract 7600 from 9500 gives us 1900

[HazE]

I think the answer is D

[HazE]

I can solve it for you but just wanted to be sure if 3.67 is the right answer?

[HazE]

Cooperatives are group of people trading together for mutual benefits.Cooperatives are owned by their workers. In cooperative its one member one vote so its more democratic and not controlled by single individual.

Partnerships are a kind of commercial profit seeking type of organization. Partnerships can be of limited liability in which case the liability of the partners are limited.

Thats all i can add. Thanks

[Author]

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