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LMR1006

Profile picture of LMR1006
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Viewing 25 posts - 1 through 25 (of 1,554 total)
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  • August 22, 2025 at 7:50 am #718904
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    Because it relates to a graph and says quantify your answer
    Kaplan must have decided not to disclose an answer to this.

    https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/f5/exampapers/f5pbe-2018-marjun-a.pdf

    August 19, 2025 at 9:41 pm #718858
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    Watching all the videos
    Working through the open tuition notes
    Have a good text book for reference
    Work through as many questions as you can – from an exam kit and the ACCA hub
    This should prepare you well

    August 19, 2025 at 7:12 am #718837
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    No the variances is based on the actual units produced at the standard

    AQ. AP

    Gives you price

    AQ. SP

    Gives you usage

    Au * SQ * SP

    It’s a flexed concept

    What did we actually make!

    Watch John’s video on this
    Try to move on from this
    It’s a 2 mark question

    The favourable material usage variance means that we used less material than expected which could have been caused by reduced levels of wastage in the production process.

    August 18, 2025 at 10:27 pm #718834
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    The answer is in the book

    Measures whether more or less material than expected during production, and it’s a key part of variance analysis.

    It’s calculated by comparing the actual amount of material used to the standard amount that should have been used, based on actual production output, and then multiplying the difference by the standard cost per unit of material.

    Usage looks at the……Difference between
    AQ at Std Price
    Std qty at Std Price

    AQ. SP

    408.5 / 152 / 10

    1.80 / 2.2 / 20

    735.30 / 334.4 / 200

    = 1269.70

    SQ SP – 950 @ 1.34 = 1273

    Is 3.3F

    August 17, 2025 at 9:49 pm #718817
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    The solid line of the Period 5 PV chart typically represents the cumulative profit/loss as each product’s contribution is added to the sales mix.
    The average profit which will be earned from the sales of three products in this mix.

    This is because the profit-volume chart illustrates how profits change with varying levels of sales, and the solid line reflects the average profit derived from the combined contributions of the products being sold.

    Each product contributes to the overall profit, and the average profit line helps visualise the profitability of the sales mix over the specified period.

    August 17, 2025 at 9:43 pm #718816
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    The relevant cost statement for the engineers’ costs should include the penalty of $500 for missing the contractual deadline on Contract X.

    The salaries of the engineers are considered sunk costs and therefore irrelevant, as they will be paid regardless of whether they work on this contract or not.

    Since there is no other work scheduled for the engineers in that week, the lost contribution from Contract X is not considered relevant because the engineers will still be able to complete it later.

    Thus, the only additional cost incurred is the penalty for the delay.

    August 17, 2025 at 9:30 pm #718815
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    To calculate the labour rate operational variance for product MN, we need to compare the actual labour rate with the revised standard labour rate.

    Budgeted Labour Rate: $8 per hour
    Actual Labour Rate:
    8×1.25=10 per hour (due to the 25% inc)
    Actual Labour Hours: 798,000 / $10 = 79,800 hours
    Labour Rate Variance = (10?8) × 79,800
    So it is 2×79,800=159,600 Adverse
    Thus, the labour rate operational variance for product MN for the last quarter is $159,600 Adverse.

    August 17, 2025 at 9:19 pm #718814
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    The correct approach is to consider the total savings and how they affect the overall loss.

    Total Loss:
    (100m)+(10m) = $(110m)

    If the overall savings from closing Division A are $75m then
    Revised total divisional loss:
    (110m)-75m = $(35m)
    Thus, the revised total divisional net loss is indeed $35m, as stated in the answer you provided.

    August 17, 2025 at 9:09 pm #718813
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    Option D, is consistent because TOC emphasises maximising throughput while minimising operating expenses.
    By keeping conversion costs low, organisation’s can improve their overall efficiency and profitability.
    This focus on minimising costs aligns with the TOC principle of optimising the system’s performance by addressing constraints and ensuring resources are used effectively.

    August 17, 2025 at 9:04 pm #718812
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    While JIT is a pull system that aims to produce only when there is an order, having a reliable forecast helps in planning and timing orders to avoid stockouts and production delays.
    Thus all three components are integral to the effective functioning of a JIT system.

    August 17, 2025 at 9:15 am #718794
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    1. Starting cash balance
    Begin with starting cash balance as of April. This is the amount of cash they had on hand at the beginning of the budgeting period. 

    2. Cash inflows
    Project the cash inflows for each month (April, May, June).
    * Cash Sales: Revenue received directly from sales.
    * Collections from Accounts Receivable: Cash received from outstanding invoices.
    * Other Income: Any other cash receipts like loans, interest income, or asset sales. 

    3. Cash outflows
    Estimate anticipated cash outflows for each month. This includes
    * Operating Expenses: Regular expenses like rent, utilities, and payroll.
    * Purchases: Payments for inventory or materials.
    * Loan Repayments: Principal and interest payments on outstanding loans.
    * Capital Expenditures: Payments for new equipment or other investments.
    * Other Expenses: Any other expected cash payments. 

    4. Net cash flow
    Calculate the net cash flow for each month by subtracting total cash outflows from total cash inflows. 

    5. Ending cash balance
    Finally, the ending cash balance for each month by adding the net cash flow to the beginning cash balance. The ending balance for one month becomes the beginning balance for the next month. 

    August 17, 2025 at 9:09 am #718793
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    What is your question?

    There is no point writing out a whole question expecting an answer.

    You should have an answer in your textbook

    August 17, 2025 at 9:07 am #718792
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    Batch Sizes and Mixing Times:
    B take 20 m per b of 40 units
    M 16 m per b 30 u
    C 12 m per b 20 u

    Throughput Calculation:
    B 1.50 – (0.25 + 0.40 + 0.15) = 0.70
    M 1.40 – (0.15 + 0.45 + 0.20) = 0.60
    C 2.00 – (0.25 + 0.50 + 0.30) = 0.95

    Throughput per Minute:
    B 0.70 / 20 = 0.035
    M 0.60 / 16 = 0.0375
    C 0.95 / 12 = 0.0792

    Ranking by Throughput per Minute:
    * C, M, B

    Production Plan:
    To maximise profit, we should first meet the minimum demand:
    1 batch of C (20 units) = 12 minutes
    1 batch of M (30 units) = 16 minutes
    1 batch of B (40 units) = 20 minutes

    This totals 48 minutes, leaving 72 minutes available.

    After fulfilling minimum demand, we can produce more Cupcakes and Muffins:

    Produce 5 batches of C (100 units) = 60 minutes
    Then 1 batch of M (30 units) = 16 minutes
    This totals 76 minutes, which exceeds the available 72 minutes.

    The best combination that fits within the 120 minutes while maximizing profit is:
    80 B (2 batches) = 40 minutes
    30 M (1 batch) = 16 minutes
    100 C (5 batches) = 60 minutes

    Total = 40 + 16 + 60 = 116 minutes.
    Thus, the optimal production plan for Wednesday is A) 80 brownies, 30 muffins, and 100 cupcakes

    August 17, 2025 at 8:57 am #718790
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    The mixing process is the bottleneck with only 120 minutes available, we need to analyse the throughput of each product and the time required for mixing. Follow a process with throughput:
    1. Batch Sizes & Mixing Time
    2. Throughput Calculation
    3. Throughput per Minute
    4. Ranking by Throughput per Minute
    5. Production Plan
    6. Maximising Remaining Time
    7. Final Optimal Production Plan
    Thus, the optimal production plan for Wednesday
    is A) 80 brownies, 30 muffins, and 100 cupcakes.

    August 16, 2025 at 10:15 pm #718785
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    Why are you spending so much time on 2 mark questions?

    August 16, 2025 at 10:13 pm #718784
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    So the conversion of hours to minutes allows for a more comprehensive calculation, making it easier to understand the time required for production relative to the available operational time.
    You convert hours to minutes to make the calculations more precise. Since the process is operational for 8 hours per day, this translates to 480 minutes (8 hours x 60 minutes/hour).

    August 15, 2025 at 5:12 am #718770
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    Yes, they are
    Have a look at the ACCA FM syllabus

    August 14, 2025 at 9:19 pm #718762
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    The correct forward exchange rate that ensures neither a loss nor a gain is calculated using the interest rate parity formula:
    1.415 * 1.02 / 1.018 = 1.418

    E rate * 1+ I rate 1st / I rate 2nd
    1st rate is euro

    Your calculation of 1.412 is close but does not account for the interest rate parity correctly.

    The forward rate of 1.418 ensures that when you convert the future euros back to dollars, you will receive an amount equivalent to the dollar investment, confirming that the investor makes neither a loss nor a gain.

    August 14, 2025 at 8:56 pm #718758
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    This is in the wrong area

    August 14, 2025 at 8:50 am #718747
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    The maintenance costs of $20,000 per annum are payable by the lessor at the end of each year. Since these costs are incurred by the lessor, they are not directly tax-deductible for the lessee. However, the tax implications arise from the tax relief on these maintenance costs.

    The tax relief on the maintenance costs is based on the corporation tax rate of 25%. Therefore, the tax savings from the maintenance costs for each year is calculated as 20000 * 0.25 = 5000

    The tax savings are realised in the year following the maintenance payment.

    Thus, the tax savings for years 2 to 6 are discounted back to present value using a discount rate of 6%.

    The annuity factor for 5 years at 6% is 4.212, and the present value of the tax savings is calculated 5,000 * 4.212 = 21,060

    The net present value of the maintenance cash flows, after considering the tax savings, is calculated by subtracting the present value of the maintenance costs from the present value of the tax savings.

    The treatment of maintenance and tax involves recognising the maintenance costs as a cash outflow and calculating the tax savings from these costs, which are then discounted to present value to assess their impact on the overall financial analysis.

    So the NPV provides insight into the net effect of these cash flows, allowing for better decision-making regarding the lease.

    This is all explained with examples in my johns lectures. The lectures are a complete free course for Paper FM and cover everything needed to be able to pass the exam well.

    Please watch them

    August 12, 2025 at 9:53 pm #718733
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    It is very difficult for me to say.
    Depends how much work you put in.
    Knowledge is very important. Practice is critical!

    If you use kaplan’s study text notes, open tuition notes and the study hub you should be well prepared.
    As long as you practice what you have learned with questions.

    August 11, 2025 at 8:05 am #718707
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    Yes, you are correct. The total fixed costs remain unchanged regardless of the increase in production volume. The fixed OAR is calculated by dividing the total fixed overheads by the total hours worked. If the number of hours worked increases, while the total fixed overheads stay the same, the OAR will decrease.

    This means that unless the question explicitly states that there is an increase in total fixed costs due to specific circumstances, we assume that the total fixed costs do not change with an increase in volume.

    The increase in volume does not lead to an increase in fixed costs; it only affects the allocation of those fixed costs across a larger number of hours. Therefore, the assumption is that fixed costs remain constant unless otherwise specified in the question.

    August 10, 2025 at 9:36 pm #718704
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    The relevant cash flow is:
    Extra variable overheads: 450 hours × $4/hr $1,800
    Rent $1,200
    Total $3,000
    Fixed costs are not incremental and idle time would normally mean that the machines are not in use are so are not an incurred cost.

    Regarding your question about the 500 incremental labour hours, they are not included in calculating fixed overhead costs because they are considered incremental and do not lead to an increase in fixed overheads, which are typically absorbed based on normal capacity. The fixed overhead absorption rate applies to the normal level of activity, and any additional hours beyond that do not incur additional fixed costs.

    August 10, 2025 at 9:31 pm #718703
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    This definition accurately reflects the essence of standard costing, which involves comparing the actual costs incurred during a specific period with the predetermined standard costs that are set based on expected levels of activity.

    The purpose of this comparison is to analyse variances, which helps organisations assess their performance and identify areas for improvement.

    Option B, while it mentions predetermined costs, implies a broader comparison of actual results against these costs without specifically focusing on the level of activity, which is a key aspect of standard costing.

    August 9, 2025 at 9:22 pm #718694
    259370296da07911609929636fafb2ceea4a9427b3e32f05c72e333a167cc341 80LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1554
    • ☆☆☆☆☆

    In Example 8, the minimum transfer price is calculated as the marginal cost plus any lost contribution. In this case, the marginal cost is $70, and the lost contribution is determined by the opportunity cost of not selling externally.

    To make transfers of Y worthwhile, A need to charge at least 70 + (10 × 4) = $110 p.u.
    The lost contribution reflects the opportunity cost of not selling the product externally

    Hopefully that explains it :0-)

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