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Yes sir,what confuses me is that the value of V*B itself.how on earth they get that mathematically,when the change(V is the differnce of the VA +VB),and suddenly we say V*B is the sumt of VandV*B,my thought process is that it should be V-VA.Thank you, i know get the implication by the last statemen(Comapny A value)t,but i don’t get the way around V*B.
I think he was asking relating to:ABSOLUTE PPP is a theory which states that the exchange rate is in equilibrium when the purchasing power is the same in each of the two countries. This means that the exchange rate should equal the ratio(Like the example you do in AFM CHAPTER 22) of the two countries’ price level of a fixed basket of goods and services. When a country’s domestic price level is increasing (i.e. there is inflation), that country’s currency must depreciate in order to return to PPP.
and RELATIVE PPP does not state what determines the absolute level of the exchange rate, but rather, what determines the change in the exchange rate over time; that is, relative PPP refers to changes in price levels (inflation rates). This proposition states that the rate of appreciation of a currency is equal to the difference in inflation rates between the two countries.
Why an increase in cash increases WC,because CA-LL=WC,IF we increase CA(Cash),the answer will be a smaler WC,PLEASE Help
Thank you for responding.Yes i hava watched your lectures and aware about portfolio theory and exam.
Ohk,i see the site,are they called specimen exams,if not,what are they called because i dont see the Pilot paper on the exam resource toolbox?
No the activity I was doing is under the absorption costing and marginal costing.I have watched the lectures sir.Still digesting the answer.
Thank you a lot?.I’m clear.actually I figured the last one after after I have posted,the 1.5 one.
The way I calculate it is that I use the high low method and find the difference(which is R90 000)and divide by 9000 units difference and get R9 per unit,not R8 variable cost per unit,after that I take R380 000 +R9x180000,and get the incorrect answer, why is it wrong?
A second problem is
Mug (Pty)Ltd incurs costs of R200000 when it produces 30 000 units and incurs costs totalling R140 000 when it produces 15000 units.The relevant range for the company is 0-35000 units after which fixed costs will increase by 45%.
Questions
1.what is the company’s total cost at 40 000 units produced?
2.What is the company’s variable cost percentage of total costs at the 40 000 production mark?.
The solution (I don’t understand part of it):
(R200 000-R140 000)/(30000-15000)=R4 per unit.
Y=mx+c
C=y-mx
C=200000-(R4x30000)
C=R80000
FMO if 40 000 units are produced:(R80 000×1.5 (I don’t understand this 1.5)=116000
VMO if 40 000 units are produced:(40 000xR4)=160 000
Total cost of producing 40 000 units is:R116 000+160000=276000In a certain question book sir.I highly need to understand this sir,perhaps i should have asked in paper F5.Thank you.
ohk it makes sense “UNTILL WE SELL”.we writeoff the balance.I think you are right.When we sell the asset it seems as if we writeoff its related D.T liability/Asset.Please correct me if am wrong.No its just an excercise in the IfRS book not an exam paper.
3000 is the deferred tax asset since the the asset was bought on 1 January 2014.Calculateda as follow 2014:IfRS depriciation as :100000 *25%=25000…..Tax allowance is 100000*20%=20000.Tax base is therefore 100000-20000=80000,and C.amount is 100000-250000=75000.Temporary D. is 800000-75000=5000*30% tax rate( 🙂 you were given 30% tax rate am sorry)this would result in 1500.D.Tax asset in 2014.
In 2015 same tax rate,depreciation and tax allowance,therefore 1500 deferred tax asset.Adding 2014 and 2015 deferred asset will result in 3000 D.tax asset at 2015 year end 31 dEC.
In 2016 June,we sold an asset and got 80000 proceeds.Year end is 31 December.And you are told that tax man allow propotionate tax allowance which means he will calculate tax allowance by saying 100000*20%*6/12=10000.where he had 60000 at the beginning of 2015 as tax base,and IfRS calculate depriciation to be 50000(C.o/b carrying amount)/2-remainiing useul life*6/12=12500.
As at 30 June we have C.A 50 0000 AND Tax Base 60000 as the opening balance on 1 Jan.2016 and 10000 Tax allowance and 12 500 depriciation.and look,50000-12500=C.A37500,and 60000-10000=50000.T.B.
Temporary diference is 12500,and multiplied by 30%=3750,which is not adjustment,i think am to long,so do we have deferred tax ?,hey Mike am rusted in my study table,ohk,thanks.Yes I see Mike.Where did you get 700 and 800 on C.R of D.T because i only get 3000 that was brought as a balance and we added 1500(balancing amount) and got 4500 as a c/b, and on C.T debits i only got 1500(taken from D.T.),4600 where did you get 700 on D.R on C.T?.Thanks.
Thanks.You are so funny 🙂 .Am showing my study mate your response quoting my statement.Thank you.
