[student999]

Yes, it’s clear now.

Thank you

[student999]

okay, last question related to book value per share,

Book value per share = net current assets (or equity) / number of shares

My question – do we exclude the intangible assets when calculating the book value per share ?

[student999]

Okay, I watched all the variance lectures again and came to following conclusion, are they correct

1. if required to prepare flexed budget (either with MC or Ab. Costing) then the FC remains the same (as original budget)

2. We just flex the FC for variance analysis only and that is why we end up calculating the
fixed overhead volume variance.

Hope this makes sense & sorry if repeating the questions again (in any way)

[student999]

Sorry, I must confirm this before proceeding,

If asked to calculate the standard cost either by marginal costing principles OR by absorption costing, the fixed overheads in the flexed/flexible budget will remain unchanged (i.e. same as in the original budget). You flexed the fixed overheads in the lectures for the sole purpose of variances (as you mentioned above)

Good day!

[student999]

Maybe this is obvious, but I just want to confirm if i understood you correctly

Dep = 5m – 0.5m / 6 years = 750000 per annum

i have used 6 years instead of 4 years because capital allowance can be claimed over 6 years OR should I use 4 years ??

Years CFS Dep C/A @ 30%
1 5m 750000 225000

2 4250000 750000 225000

3 3500000 750000 225000

4 2750000
(500000) disposal value
= 2250000 675000 (2250000 *30%)

[student999]

Suppose the question says the working capital will be purchased at the END of year and any changes to WC will occur at the end of year 1. will the answer be different to the above question?

Sorry sir. it’s confusing me please help

[Author]

Posts