[jimbob1212]

I initially got two negative NPV’s due to the 60% remittance but once I added back the sale cost (which was in year 4, at PV), I got a positive figure for both. Did everyone add back the sale which was in PP?

This was a very tough paper.

The hedging on interest rates was a standard question which comes up a lot, so I felt OK with that, the other Section B question was a nightmare.

[jimbob1212]

Passed – 68%.

Thank you to all that helped :).

[jimbob1212]

On a serious note – thanks a lot for your explanations

[jimbob1212]

Ha ha

[jimbob1212]

Mike, can you do my resit for me please?

[jimbob1212]

Thank you so much! Would it be possible to show us your goodwill/ retained earnings calcs for Q1 please?

[jimbob1212]

Hi Mike

I know this isn’t exactly a solution or music to your ears.

However, I’d be happy for you to send a picture via your phone, or email me a picture, and I’d be happy to upload/ write the workings out here?

I have a feeling different people will bug you for different things,

Let me know
J

[jimbob1212]

Please Mike 🙂 Would help me sleep better at night

[jimbob1212]

@emo777 said:
Guys, lets discuss mcqs:

1) comparability – disclosure of policies and comparative information
2) ratios – only second option
3) defered tax should not be discounted
4) regarding inventory, cost was less than nrv, 51600 or smth so choose it
5) associate revenue disregarded
6) 45% of ordinary shares but all others less than 1% is also correct control
7) going concern as adjusting
8) regarding grant, the answer was 3750000 or smth
9) lease. Overstated by 2000

Literally got same answer except for 7 and 4,

For 7) I thought adjusting events were things that affect only the financial year we are looking at, going concern would affect future periods? So I put down the customer which went bust and another one as adjusting event, didn’t include going concern or the fire as adjusting events..

[jimbob1212]

Yep so I for the unwinding bit I literally took 8% of the deferred consideration, and then 6/12 months as finance cost was only for 6 months..and then yes took it out of retained earnings along with the PUP etc..can’t remember G/W figure but if it was negative then I’m sure they would have had it for a 30 marker as it would have it’s major impacts on the P&L side, I might be wrong though?

Question 2 was really hard I thought

Question 3 I made stupid mistakes like working out deferred revenue but not including on the balance sheet..

MCQ’s were so hard I thought, again I think I’m in the minority here..

[jimbob1212]

Goodwill
Consideration paid: 9000*0.6*1/2*$x
Deferred cash: 9000*0.54*0.6*(1/1.08)
FV @ AQN of NCI: 0.4*9000*$1.5
Net assets of S: Can’t remember but included something below FV which reduced their net assets
Also included deferred tax as an asset
Share capital of S

I didn’t get negative good will though..

[jimbob1212]

negative good will? did you include the deferred tax asset as part of the assets of the sub?

[jimbob1212]

For Q2 my memory is so blurry but I remember it asking whether the event required an adjustment to the financial statement, and what audit procedures would need to be done before adjusting..is that correct? Was quite tricky.

[jimbob1212]

The audit risks – I also said that as they were planning to pay a dividend that they needed to vouch back to the supporting evidence to ensure it was in the right cut off or cash overstated..?

[jimbob1212]

@gianina said:
Riiight…the control and its objective:
1. Goods checked for quality and orders – to accept only good quality purchases and only the co’s orders
2. Authorization in place for purchases – to only purchase the needed goods, efficiency in the purchase system
3. Inventory update automatically – never to run out of inventory in order not to loose sales & customer goodwill
4. And i think there was something with matching invoices to GRNs and purchase orders but i do not recall properly …

Agree – but for the 1st one I had that down as a deficiency – as they didn’t check the quantity of goods vs the GRN/ PO

But I guess it could be a control too!

[jimbob1212]

@shehzadhussain said:
what was the answetr q2 sec-B the buss services etc

which service provider has high %
the bus
the express
the otherone ( i forget the name )

I put the last one which had the overall highest satisfaction but mentioned that his quote was somewhat true as it had the equal highest value for money satisfaction and highest for something else.

[jimbob1212]

@siknagudruole said:
I think budgeted selling price was $16995 and actual $16000 with budgeted sales of 140 and actuals sales of 154

For sales price variance did you use std. contribution or std. selling price?

[jimbob1212]

@beataziobro said:
Examiner was asking for breakeven chart this is where the total revenue line cross the total cost line, for multiple products you must cumulate units, costs and revenue and then draw lines, this is normal chart not cvp.

the next subquestion was what would happen if the products were sold starting from the most profitable first, when you draw cvp you start from the most profitable one so they wouldn`t ask for this if you had to draw cvp chart.

so are you saying drawing a PV graph would not score marks?
Did all the cumulative revenue etc.

[jimbob1212]

@umerr786 said:
I had $110 as relevant cost, but it just seems wrong and didn’t cross my mind during exam that labour was in employment anyway so they would be paid regardless, so the only relevant cost should be the lost contribution which is $40

Agreed, although it’s more annoying that we will never find out the answer..

For question 4, I did the optimal mix, would I be penalized for this? I worked out the contribution per unit for each product, then ranked them, then I worked out the cumulative revenue/ contribution.
I still drew the constant mix line as it is from the fixed cost up to the cumulative revenue, so I assume I still get marks?

Need to get an idea so I know what to study for in December.. 🙁

[jimbob1212]

Also for the $40 relavant costing, that’s a lot different to the question we had in the exam.

I can’t remember exactly the question but it mentioned that acquiring labour for the project immediately was unavailable because they had to strike, so we had to use our current labour.

Therefore using the current labour means we lose out a contribution of 10 hrs x $4 ($40), but we do not worry about their current wages because that is not a relavant cost.

[jimbob1212]

@siknagudruole said:
Hi All,

I believe exam was a hard one and definitely examiner had a slightly different approach comparing to previous exams. MCQ- I was not sure about 5 questions including advantages of direct vs indirect input? Some mcq there really hard and took long time to get the answer.
MCQ
1-Got £1.02 ABC 0.12+direct cost of 0.90
-Relevant cost got £40 but should be £110 it’s in OT mcq chapter9 q5
-For the goods received notes question : Format check & sequence check
-For the level of information question : Both operational(Tactical should be long term over 5years)
-For motivation picked 2
-Accept both RI and ROI RI= profit 10K less 7.5 cost of investment=accept, ROI= was giving something like 13.3%
-For joint processing question: reject the first and reject the second
-which is MOST LIKELY” to be affected- Government
-On the selling price I got $20. 35-0,01(1500). Not so sure ever.

Part B:

Q1 Target Costing
A-Steps
B-Advantages and Disadvantages for cleaning company if adopted TC

Q2 Minimax regretion/Expected Value/Use of Probabilities

A)

Contribution per unit sold : $5.20 – $1.80 = $3.40
Construct payoff table for each possible daily demand and each possible daily supply

Demand- 500,550,600,650
Supplly
500
550
600
650

For example :
If supply is 500 and demand is 500 : contribution = (5.20 – 1.80) x 500 = $1,700
This amount is the same for demands of 550, 600, 650
Not sure but when supply is 600 and demand 500: 600*(5.20-1.80) less 100*1.80

B) Explanation of EV and adoption of probabilities by flower company

Q3
A- Overall satisfaction of bus company – no idea
B- Comments on directors view- made few points e.g. not enough info, just made up staff
C- Definition of Efficiency and effectiveness followed by one example

Q4
A- Weighted average contribution to sales ratio. Got 0.6092 or 60.92% I did exclude % of fixed labour when calculated contribution
B- Margin of safety in $
C- Draw a chart with not paper provided 🙂
D- Can’t remember Breakeven point?

Q5
A) Sales variances- redraft
Used two formulas
Sales Volume Variance (ASale – BSale)SProfit/unit
Sales Price Variance (APrice – SPrice)ASales

B) Assess companies and directors performance taking in to account what in country price decreased by 2% but market share increased by 5% and director has heavily invested in advertising.

I do not expect to pass F5 this time. ACCA is designed to be difficult and you should expect to be tested not only in the scenarios from revision kits but overall understanding of performance management, no blame to ACCA at all. This is why it’s well respected qualification.

awesome response, jogged my memory quite a bit.

For MCQ I think I disagree with you on quite a few aspects.

The ROI question meant that the ROI of the investment was LESS than the ROI of the division, therefore REJECT ROI, ACCEPT RI

The tactical decision was regarding future budgeting, Tactical is regarding anything for future which provides support to senior management.

[jimbob1212]

For the variances question, what sort of answers did we have for part b? The performance of the company and sales manager?

I completely rushed this as I ran out of time.

My answer included planning being somewhat uncontrollable, operational being controllable.

I related it to part a) but my part a answers were wrong :(. Think I lost a lot of marks here.

[jimbob1212]

Oh yeah, what did you guys write for the stakeholder question?
I too didn’t really understand the question, so I guessed government

[jimbob1212]

what about the very first question on ABC costing?
think i got the overheads to 0.116 and then added the extra 1 direct cost, came to 1.12$ p.u? might be wrong.

Also the one where it was joint processing, i remember thinking reject first one, accept second.

[jimbob1212]

@umerr786 said:
I meant C/S ratio as 0.6 not CVP

same, i got the cs ratio as about 60%.

did you exclude the % of labour which was fixed costs before you worked this out right?

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