[Jason]

Thank you soooraj for your reply.

[Jason]

First time pass 70%. Very surprised and relieved.

[Jason]

@ipavlena said:
yes 3h x 0.80 $

Ah yes that is what I did, maybe I did come up with $23 after all

@ipavlena said:
So if I did not convert the kilograms into grams ..my answer was not correct ?

I don’t think you made the error I made, I would have taken the price per kg of one of the materials and multiplied it by say 410g instead of 0.41kg. so my figures will be way out.

[Jason]

Well I am just lifting directly from the Kaplan study book at it equates the Investment element of the equation to “Divisional Capital Employed” i.e the Division’s NCA+CA – CL.

This is from the tutor here on another thread, probably explains things better –

“When asked in the exam, ROI relates to divisional performance measurement.

In this respect it is exactly the same as ROCE except that of course a division has no capital employed – hence it uses total investment (i.e. total net assets unless told otherwise). (Obviously for a division there is no interest or tax involved when looking at the profit)”

So Net assets are NCA +CA – CL correct?

[Jason]

Maybe I didn’t read the question properly but I thought there was a manager for each division and they stated the controllable profit they earned each for their division, i.e the Divisions F’s profit and the Division N’s profit?

[Jason]

@poutsos said:
so you think if i did the ROI question net profit/ strictly investment like non current asset is wrong? please advise

I think so, going strictly by the book it says – controllable profit divided by capital employed and that capital employed is total assets less current liabilities or total equity plus long term debt.

[Jason]

@christa316 said:
How did you guys calculate question 2 I just used the throughout times the units produced in option one. ? I only got the 2% times the salary for the first division. What figures did you use to get the divisional profit

I just did the additional units multiplied by the $12,500 benefit given in the question. I think this might be wrong though..

[Jason]

@haibe said:
I think ROI is strictly investment like non current asset and not capital employed which would include long term liability and all.

Although they are essential the same

My Kaplan text books says it’s capital employed being NCA+CA -CL.

[Jason]

I was just wondering of those saying the cost of manufacturing X was $23, did you include a variable overhead rate multiplied by the machine hours in your calculation?

[Jason]

I think I have failed, looking at all the mistakes I made, I didn’t convert the cost to grams on that mix/ yield question, rookie mistake but I was focusing hard on remembering how to do the variances. Annoying really, hopefully I will get some marks for at least doing the workings of the variance. I actually think they should just give the cost per gram and it’s a bit of a trick to catch you out like that with the pressure of the exam and the time limit. It’s not a test of the syllabus just a test if you are paying complete attention.

The dentist question I found odd, 7 marks to explain why it wasn’t a participative budget, seemed to be a lot of marks for discussing this, I did not come up with seven separate points.

I worked out the ROI as being I think 28% for one manager and 11% for the other, took controllable profit divide by capital employed

For the question about bottlenecks I simply multiplied the extra units by the long term value they gave per unit and took off the investment. Not sure if I viewed that too simply? My answer was to go with option 1. I saw the bit about throughput at the top but ignored it..

The final question was beyond me, I did not give this enough study time and it seemed a particularly difficult variant of that style of question, so I blew a lot of marks there.

MCQ I found reasonably ok.

[Author]

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