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But sir under/over absorption variance is calculated at the end of a period so we could divide it in two parts. One part should be absorbed on units sold and remaining should be in closing invenotry to transfer it on actual/real cost per unit.
Why we don’t do this? In the way u told the inventory value in balance sheet will not be on real cost it would be on budgeted cost/unit sir.
Please explain a little more.
I’ll be grateful
Thank u for ur kind response.Ok sir thanks. Sir answer is given it is wrong.
I was strugling with the concept.For question#1 above i want to simply ask that if there is no scrap value then still we divide it by 2 which makes the intial invvestment half. Sir it wiil not be wrong? Why we divide it by 2?
Yes sir i have watvhed ur free lecture but this question was confusing me.. Sir got your point. But can u please a little explain me whybit is not effectiveness.. Like the purpose of looking at avg class size may be to check that if there are more students it is quite possible that we may not have proper check and balance on students. We could not achieve oir desired objective of providing them best education
Sir.. As per knowledge i gained from book:
The accounts department finally will have four documents:
1. Order form… So that accounts deptt can confirm price agreed with supplier from order form before paying invoice.2. G. R. N… So that quantity received can b confirmed.. (delivery note will tell us the good delivered by supplier not actually received as these may b stolen on the way.)
3. Invoice… It is matched with G. R. N and order form to confirm quantity received and price agreed respectively.
4. Delievery note….. And this is not making any sense to me..
Sir.. Delivery note and invoice both are sent by supplier. Why we check whether they agree or not? Lets say if it does’t agree then what we will do? Could’t understand
Thank u so much sir for your kind reply. Just one confusion regarding intangibility is:
There is no specific product that the cost can easily be measured for.
Sir.. If there is no physical product then just material cost will not incur normly. But still we can easily charge cost of labour for time taken by service and overheads cost by some mean.
For example:
A consultant provides consultancy so he can easily charge cost of his time and overhead cost by some way..
Please explain a little more this point.
I’ll be really thankful to u.Hmm..vooking and serving makes sense to me. But m confused on a point..hope u tolerate on my such weird questions.
1. Service must be intangible. But hotel cook food and serves to customer and food is tangible product. (If u say that no hotel is cooking and serving the food for the customer so cooking and serving are intangble product then i agree with u)
But a shirt manufacturer (a manufacturing business) may also claim that then that he is service provider as he stich the fabric and offer to customer.
Yeah i have watched ur lectures. My point is that ultimately factory overheads will be charged to production deptts. So why not we charge whole of the factory overheads on first instance to production deptts.
ThanxEven a supervisor is working on a specific job then still his cost will b treated as indirect cost(overheads)?
A supervisor spent 5 hours on a particular job. Rate/hour is 10. So payment will be $50. This $50 is direct or indirect cost?
Thanks for ur patience and kind reply
Plumbers/audit firms also uses job costing. Their main resource is also time. Question is why ship builder is most likely using job costing but not he kittchen fiter. Is this the difference that here the only resource is time for the kittchen fitter?
Whaaat?…lunch time is not idle time? But sir in manu books even in kaplan bpp it is written that lunch time, tea breaks is also idle time..and idle time should b paid..so this is confusing me
Yeah i typed the question correctly and conveyed the theme accurately. In the answer they did’t re-apportion the budgeted service centre cost to production centres to calculate absorbtion rate..oki just wanted to confirm whether i’m right…thanx for you kind guidline..
Thank you so much my dear sir..Question is typed correctly. I got it..thanx again..
Yeah you r right to say that i did’t type the whole question just to save your time. John sir i used the same wording which is related to NRV.(Whichbis written above)..The other data is just for cost/unit under..but if u say i’ll type the whole..just point of confusion is that why he incorporated the increase in v.selling cost in 2003..whereas the change is from 2004..is the answer wrong in the book?
