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Hi My dear Tutor, I have a question
When we prepare budgeted production we usually calculate it
Sales unit+closing inventory-opening inventory but in the Bpp study text book sometimes
provision for loss given which is calculated:
sales unit+provision loss for finished good+closing inventory-opening inventory
Simultaneously budgeted material purchase is calculated
budgeted usage+closing inventory for raw materials-opening inventory for raw materialsbut if there is provision loss for raw materials the calculation will be:
budgeted usage+closing inventory for raw materials+provision loss for raw materials-opening inventory for raw materials
Why we add provision loss for finished goods and raw materials over budgeted production and budgeted purchase?
Also, your lecture notes are helpful but In the Bpp book there some cases which need to be paid attention.
My another question, will budgeted statement of profit and loss and financial position be asked in long question part of F2 exam?What will usually be tested in F2’s second part ?
The only place in the exam where losses are likely to be relevant is in process costing, and I explain how to deal with them in detail in my lectures.
Provisions for losses are a financial accounting concept and are not relevant in Paper F2. Losses are relevant, but in process costing as I have already written.
(You mention that my lecture notes are helpful, but I hope you are not using them on their own without watching the lectures. They are lecture notes and it is in the free lectures that I explain and expand on the notes. If you are not watching the lectures then don’t bother using the notes 🙂 )
With regard to your second question – statements of profit and loss and statements of financial position are Paper F3 and not are not required in Paper F2.
Everything relevant to Paper F2 is covered in my free lectures.
abnormal loss+normal loss=actual loss
normal loss-abnormal gain=actual loss
expected output=input -normal loss
expected output=actual output+normal loss or actual output-abnormal gain
actual output+normal loss+/-abnormal loss/abnormal gain=input
cost per unit=total cost/expected output
cost per unit based on scrap value of normal loss=total cost-normal loss based on scrap value/expected outputcost incurred in the period
equivalent units
cost per equivalent uniti could my own found formula but i do not want.
this is process costing, i solve questions without any big problem in process costing but what i asked the question above probably is not relating to process costing.i found it in bpp study text that is why i asked.
I see budgeted statement of financials position and profit or loss account in bpp study text that is why i asked.
I used your lecture notes for forecasting, methods of project appraisal and budgeting.
the rest i read in both bpp and becker, i do not have any problems in cost classification, accounting for overheads, labor and material including marginal and absorption costing, joint and by-products but can be slight setbacks in process costing’s fifo and weighted average cost method.Anyway,what i want to say, when i started to solve questions relating to forecasting i just stuck because questions structure was different, maybe first time i saw question that is why.
Now working budgeting, flexed and fixed budgeting is okay but became stuck in budgeted cash ((
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