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Dear John, thank you for your lectures!
I have one question regarding the example in Opentuition Notes: Example 4, Chapter 14.
Sales Volume Variance (Sales Margin Variance – are these the same?):
In your lecture you said that it is calculated by taking differences between actual sales quantities and standard sales quantities multiplied by STANDARD PROFIT (in BPP they also define the calculation this way).
However in the solution to the Example 4, it is calculated differently: for actual quantities, we take the difference between ACTUAL PRICE and STANDARD COST – which is not the STANDARD PROFIT.
Could you please explain the different methods of calculation and when it applies?
Thank you,
Regards,
RustemDear John, thank you very much for your reply! Not it is clear to me.
Yes, it from BPP Revision Kit for 2014-15 (Question #3.7).Dear John, thank you for all your lectures – I find them really helpful!
I have a question – did not understand the following question:
>>>
One of the products manufactured by a company is Product X, which sells for $40 per unit and has a material cost of $10 per unit and a direct labour cost of $7 per unit. The total direct labour budget for the year is 50,000 hours of labour time at a cost of $12 per hour. Factory overheads are $2,920,000 per year.The company is considering the introduction of a system of throughput accounting. It has identified that machine time as the bottleneck in production. Product X needs 0.01 hours of machine time per unit produced. The maximum capacity for machine time is 4,000 hours per year.
What is throughput accounting ratio for Product X?
>>>MY QUESTION:
>>>If 400,000 units of X can be produced (4000 hours / 0.01 hour of machine time per unit produced), total labour costs = 400,000 * $7 = $2,800,000.
But question states that total direct labour budget is 50,000 labour hours x $12 = $600,000, which is a way less than what is needed to produce 400,000 units of X (=$2,800,000 calculated above by me).
Thus the bottleneck seems to be the total direct labour hours, NOT machine time.
Why question states that machine time is the bottleneck?
In further calculations of T.A.R, they show that factory cost per bottleneck hour ($2,920,000 + $600,000)/4,000 – but why they don’t consider $2,800,000 calculated above?
>>>Thank you, John for your attention!
Thank you God, and Thank you Opentuition and Mike Little, I passed with 51%, first attempt, main source was opentuition lectures.
Dear benfiaz, thank you for your answer.
I’ve found this on the official acca site:
“If your status allows you to enter for papers across modules, please remember that you must complete the papers in order and enter for outstanding papers in your current module if you wish to enter to sit papers in the next module.
For example, you may have already passed papers F1 and F2. You can enter for papers F3 and F4 at the same time, but you would not be allowed to only enter for F4.”
Can anybody comment on this?
Thank you!