[Molly Sum]

hi sir,
can you please correct me again for the above questions
question 1
500-70=430+46=476
46/500+476/2=46/488=9.4262 ?
question 2
5940-600=5340+360=5700
360/5940+5700/2=360/5820=6.1855 ?
thank you

[Molly Sum]

H 15120 – 10000 ( capacity 10000 units x 100%)
L 11280 – 6000 ( capacity 10000 units x 40%)
3840 & 4000

VC per unit : 3840/4000 = $0.96
FC : 15120 – (10000 x $0.96)=$5520
if operates capacity of 85% : 10000 x 85%=8500 x $0.96=$8160

y = a + b x
y= 13680 + 0.96x

answer is $13,680

thank you

[Molly Sum]

hi sir, I did tried to do this questions but there are two questions not able answer and hope you can please give some advise to complete it:

refer my above question

question 1
assuming that the fixed production overheads absorption rate is based upon normal production of 12,000 units per month, what will be the profit for month 2 using the absorption costing method?
answer is 2,375

question 2
what would the profit for month 3 be using the marginal costing?
answer is 17,000

thank you

[Molly Sum]

hi sir ,
my working below :
input 2800+200 = 3000 kg value at $21,150 ( 2700x$7.50=20250+900=21150)
less : normal loss = 300kgx$3 = $900
total : 2700 kg & $20,250

$20,250/2700kg=$7.50

the answer should be D.$21,150

thank you

[Molly Sum]

hi all, for my understanding :
under absorbed that is because in budgeting only expected to the cost $105,000 but in the actual production the cost only did use $108,875 therefore for budgeting is under absorption :

budget overheads cost$105,000
actual overheads cost $108,875
under absorbed $3875

thank you

[Molly Sum]

hi sir, thank you for your reply
I’m asked the total cost of my question, because in free lectures chapter 7- overheads – questions 5 to ask it but the question I think should be job costing and regret wrong to ask.

[Molly Sum]

hi sir, thank you for the reply

In fact, I was able to get the overheads absorption rate, but do not know how to calculate for budgeted fixed overhead cost per unit for product Y, whether it is important in this type of questions in exam ?

my working for OAR :
P
36×6000 units = 216,000
48x7500units = 360,000
total 576,000minutes / 60 minutes = 9600 hours
$96000 / 9600 hrs = $10
F
25x6000units = 150,000
35x7500units = 262,500
total 412,500/60=6875 hours therefore $82500/6875hours=$12

now I able to know cost per unit : 48/60X$10=$8 and 35/60x$12=$7
therefore product y for P $8+for F $7=$15 the answer is D.$15
hi sir , what about if question ask total cost ?
thank you

[Molly Sum]

hi sir, thank you your explain.

[Molly Sum]

hi sir, what about the loss of 2000 x 10%=60units?
my working :
dr input 2000 unit $8000
dr.conversion cost $8480
total : 2000 units & $16480

cr.output/fg 1860 units $14880
cr.normal loss 60units $960
cr.adnormal loss 80units $640
total : 2000 units & $16480

thank you

[Molly Sum]

If question to ask what’s the actual output whether is 2000-60-80=1860x$8=$14,880 ?
thank you

[Molly Sum]

Hi sir , please correct the following :

b/f units – 100 x $5 = $500
4th receipt – 150 x $5.50 = $825
total : 250 units & $1325

1325/250 = $5.30

16th – issue – 100 units x $5.30 = $530

inventory bal. 150 units x $5.30 = $795
20th – receipt – 100 units x $6 = $600
total : 250 units & $1395

1395/250=$5.58

21th – issue 75 units x $5.58=$418.50

inventory bal . 175units x $5.58 = $976.50

now I can get the answer is B.$976.50 ?

thank you

[Molly Sum]

hi sir, I cannot find a free lecture “Inventory and IAS2 Valuation of Inventory – Example 5
can you please inform in which chapter? thank you

[Molly Sum]

hi sir, thank you very much

[Molly Sum]

hi sir , thank you for the reply

if calculate the budgeted opening and closing finished goods inventory for quarter 1 to thousand units.

the calculation of the following correct ?
opening finished goods inventory : 1,950,000 ( sales units quarter 1 ) x 6/78 = 150,000 units ?
closing finished goods inventory : 2,275,000 ( sales unit quarter 2) x 6/78 = 175,000 units ?

thank you

[Molly Sum]

hi sir , thanks your explanation

if closing finish goods inventory in Quarter 4 is 150,000 units. calculation the number of units to be produced in quarter 4 to the nearest thousand unit, whether correct below?

quarter 4 – 2.275,000 x 6/78 = 175,000 units for opening ?
( 13 week x $6 per kg = 78 days per quarter ? closing inventory based on 6days demand but now question give is 150,000 units? )

therefore 2,275 +150-175=2,250
2,250 units should be produce units in quarter 4 ?

thank you

[Molly Sum]

available for sale 1,975,000 units means that sold unit it should be also 1,9750,000 units?
therefore, understanding the unit to remain in inventory is zero?

can you please explain if the demand is more than the amount available, then there will be zero inventory left ? demand in this question is how ?
if the demand is less than the amount available then the inventory left will be the difference ? amount available is how much?

why use logic here ? is not use functional budget ?

thank you

[Molly Sum]

why opening added to produce units ? produce unit whether is sales unit for restrictions of quarter 3 sales unit of 3,250,000?
production budget is in quantity it should be sales unit + closing – opening + loss unit,
same material purchase budget.

can you please explain the calculation for this question , I’m sorry , sir. thank you.

[Molly Sum]

Opening inventory of FG is 325,000 units
Produce units 6,600,000 kg / 4 kg = 1,650,000 units available for sell ?

But I’m not able to get the zero inventory left ( answer is zero units ) , possible advise again ?

Thank you

[Molly Sum]

another question :

the company’s raw material supplier has informed them that due to restrictions on the manufacture of raw material, the supply to the company will be restricted to 6,600,000 kg per quarter for the foreseeable future beginning from quarter 1. Y co decides to purchase the maximum amount of material available in each quarter and build up inventory of finished goods whenever possible. Under these restrictions the budgeted opening finished goods inventory in quarter 3 will be 325,000 units.

calculate a revised closing finished goods inventory for quarter 3 to the nearest unit, taking into account the restrictions on the raw material supply.

please help. thank you

[Molly Sum]

produce units 3,175,000 x 100/80 = 3,968,750 units x 4kg = 15,875,000 kg x $6 per kg = $95,250,000.

nearest thousand dollars of budgeted cost of raw material usage should be $95,250,000 ?

thank you

[Molly Sum]

Q1
actual unit sold were 1200 less than budgeted :
because budgeted units 12,000 – actual units 10,800 = 1200 units ?

and actual sales revenue was 1640? because actual units sold 10800 x $150 =$1620000 + $20000 F = $1640000 ? therefore 1640 should be correct as actual sales revenue.

Q2
production was : should be 100 units less budgeted ?
because the variance 2000 A / $20 per units = 100 units means that standards are not met the budgeted ?
( understand costed at fixed overhead $20 per unit)

Q3
material usage $8000 adverse , because 320kg in flexed budget the usage used more than original budget plan?

material price variance is $7500 F , therefore material caused the biggest cost variance , where a decision to pay is less than the original budget and not a more than ?

Q4
actual selling price higher than standard because :
sales price variance is Favourable of $20,000?
which is actual sold units 10800 x $150=$1620000 + $20000 F ?

please correct me the above , thank you

[Molly Sum]

hi sir , sorry for Q3 typing error ,
I have take 8000 A / $25 = 320kg is actual usage used over the budgeted? therefore is 8000 A?

thank you

[Molly Sum]

thank you for the reply

can you please refer above question again, the below question ask :

Q 1.
actual units sold were : 400 less than / 400 more than / 1200 less than / 1200 more than
budgeted and actual sales revenue was : 1640 / 1600 / 549 / 560 ?

my answer ;
actual units sold were 1200 less than budgeted and
actual sales revenue was $ ?
( I could not work out the answer? )

Q 2.
production was : 100 units more / 2000 units more / 100units less / 350units more than budgeted ?
how to get the answer ?

Q 3.
material caused the biggest cost variance , where a decision to pay : less that / more than , standard price resulted in the company using : 320 kg less than original / 320 kg more than flexed / 320 less than flexed / 320 more than original budget .

how to get the answer ? what does mean decision to pay ? flexed mean in actual production ? and budgeted is cannot change?
I have take 8000 A / $25 = 300kg is actual usage used over the budget ? therefore is 7500 A?

Q 4
In the last month actual selling price was : equal to / higher than / lower than , standard ?
my answer is higher than, is correct ?

thank you

[Molly Sum]

hi sir,

please correct me the below calculation to get the budgeted & actual units :

budgeted unit : budgeted profit $600,000 / $50 = 12,000 units ?
actual unit : standard profit on actual sales $540,000 / $50 = 10,800 units ?

thank you

[Molly Sum]

hi sir , i’m sorry, my question is an example of 0.9 means that 0.9 times for internal use of the sales ? thank you

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