[Tgl]

Because, it says on Chapter 7 (page 31) of the lecture notes: “All costs of indirect workers are indirect costs.”

[Tgl]

Regardless of whether its a direct or indirect worker?

[Tgl]

Hi tutor,

I have gone through your lecture note and the corresponding video lecture on this topic. However, I still couldn’t fully grasp the treatment of overtime premium.

In the following example from BPP’s MA text book, can you kindly explain why the semi-skilled workers’ “specific overtime” pay is being treated as a direct cost?

QUESTION: Jaffa Co employs two types of labour: skilled workers, considered to be direct workers, and semi-skilled workers considered to be indirect workers. Skilled workers are paid $10 per hour and semi-skilled $5 per hour.

The skilled workers have worked 20 hours overtime this week, 12 hours on specific orders and 8 hours
on general overtime. Overtime is paid at a rate of time and a quarter.

The semi-skilled workers have worked 30 hours overtime, 20 hours for a specific order at a customer’s
request and the rest for general purposes. Overtime again is paid at time and a quarter.

What would be the total overtime pay considered to be a direct cost for this week?
$275; $355; $375; $437.50

ANSWER:

Skilled workers: Specific overtime (12 hours x $10 x 1.25) = $150 [Direct cost]
Skilled workers: General overtime (8 hours x $10 x 1) = $80 [Direct cost]
Skilled workers: General overtime (8 hours x $10 x 0.25) = $20 [Indirect cost]

Semi-skilled workers: Specific overtime (20 hours x $5 x 1.25) = $125 [Direct cost]
Semi-skilled workers: General overtime (10 hours x $5 x 1.25) = $62.50 [Indirect cost]

The correct answer is therefore B. [$150+$80+$125=$355]

If you selected option A, you forgot to include the direct cost of the general overtime of $80 for the
skilled workers.
If you selected option C, you included the overtime premium for skilled workers’ general overtime of
$20.
If you selected option D, you calculated the total of direct cost + indirect cost instead of the direct cost.

[Tgl]

@mhaa said:
Are impairments of 30.5 (partial) and 30 (full) correct?

I got the same figures.

[Tgl]

It says here on the ACCA website:

“From 2019:

We will publish past exams twice a year, after the June and December sessions.
Each past exam will contain a selection of questions from the two preceding sessions.
The questions are selected by the examining team as being most helpful for students to practice.”

https://www.accaglobal.com/hk/en/student/exam-support-resources/professional-exams-study-resources/strategic-business-reporting/past-exam-papers.html

Guess that means we won’t get to see the March paper until after the June exam session.

[Tgl]

MARK ALLOCATION:

Part 1a: Technical 16 + Professional skill 3
Part 1b: Technical 16 + Professional skill 4
Total marks for Part 1 = 39

Part 2a: Technical 10 + Professional skill 3
Part 2b: Technical 12 + Professional skill 3
Total marks for Part 2 = 28

Part 3a: Technical 14 + Professional skill 4
Part 3b: Technical 12 + Professional skill 3
Total marks for Part 3 = 33

[Tgl]

Mark allocation:

Part 1a: Technical 16 + Professional skill 3 or 4 (not sure)
Part 1b: Technical 16 + Professional skill 3 or 4 (not sure)
Total marks for Part 1 = 39 (one of the two parts had 4 marks for professional skills)

Part 2a: Technical 10 + Professional skill 3
Part 2b: Technical 12 + Professional skill 3
Total marks for Part 2 = 28

Part 3a: Technical 14 + Professional skill 4
Part 3b: Technical 12 + Professional skill 3
Total marks for Part 3 = 33

[Tgl]

@tarfoufo said:
Tax was current estimate £3400
Over provision -120
Increase in deffer tax 300
Pl £2900
CL 3400
NCL deffer tax 1200*25%= 3000

Was the final amount a deferred tax asset or deferred tax liability?

[Tgl]

Wasn’t the statement the exact opposite: Legal over substance? That is why I didn’t choose A as an answer.

@chris1975z said:
Substance over legal is faithful representation? I need to see questions again as can’t even remember mcq 1 now!!!!

[Tgl]

@kenzochin said:
Guys I think for Q5 to calculate the cost of equity, the equity risk premium has already been multiplied by the beta value there for it is called Equity risk premium, we only need to multiply the beta value if they had given ‘risk premium’ instead.

Finally! Someone who thought alike about inflation.

[Tgl]

From what year were the price/cost to be inflated?

I started inflating from Year 2 onwards, based on the Year 1 figures. (Because there was no mention of the figures being on “current price terms”)

The question was very much silent about this.

[Author]

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