• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March and June 2025 exams.
Get your discount code >>

basic investment appraisal techniques

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › basic investment appraisal techniques

  • This topic has 3 replies, 2 voices, and was last updated 3 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • October 21, 2021 at 8:31 am #638679
    johnbriane
    Member
    • Topics: 170
    • Replies: 160
    • ☆☆☆

    sir the below question is from the kaplan texting your understanding

    A manufacturing company is considering the production of a new type
    of widget. Each widget will take two hours to make.
    Fixed overheads are apportioned on the basis of $1 per labour hour.
    If the new widgets are produced, the company will have to employ an
    additional supervisor at a salary of $15,000 pa. The company will
    produce 10,000 widgets pa.
    What are the relevant cash flows?

    for this question the answer is only the supervisor cost of $15000… and they stated that fixed ohs are not incremental

    but what if they stated the company will produce additional 10000 units ?

    will we multiply 10000 units x 2hrs x $1 per hour = $20000

    so now will this $20000 along with the $15000 which gives a $35000 will be the total relevant cost sir ?

    October 21, 2021 at 3:45 pm #638717
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54657
    • ☆☆☆☆☆

    Fixed costs remain fixed in total by definition. Therefore it is irrelevant how many additional units will be produced – there are no extra fixed costs (other than obviously the extra supervisor).

    October 22, 2021 at 2:44 pm #638795
    johnbriane
    Member
    • Topics: 170
    • Replies: 160
    • ☆☆☆

    ok sir thank you

    October 22, 2021 at 4:21 pm #638810
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54657
    • ☆☆☆☆☆

    You are welcome.

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘basic investment appraisal techniques’ is closed to new replies.

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • Rajpoot on ACCA BT Chapter 4 – Organisational culture – Questions
  • John Moffat on FA Chapter 6 Questions Depreciation
  • MZahidrafique on ACCA F2 Key to success
  • ACCA2025@ on Professionalism, ethical codes and the public interest – ACCA Strategic Business Leader (SBL)
  • Barlow1989 on CIMA BA2 – Accounting for Management

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in