• 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 September 2025 exams.
Get your discount code >>

Cost

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Cost

  • This topic has 3 replies, 2 voices, and was last updated 2 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • August 27, 2022 at 5:25 pm #664445
    Anonymous
    Inactive
    • Topics: 28
    • Replies: 15
    • ☆

    Is it true:

    1) Material cost is the cost of purchasing the raw material from the market?

    2) Labour cost is the cost of wages or salaries paid to labour for their work?

    3) Variable overhead cost is the cost of other things of a product such as paint, oiling, furnishing etc.

    4) Fixed cost is not directly related to manufacturing of a product rather it is non-production costs such as: rent / insurance / fees etc.

    5) Please explain more about what is variable overhead and fixed overhead?

    August 27, 2022 at 5:36 pm #664452
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54701
    • ☆☆☆☆☆

    1. Yes
    2. Yes
    3. Yes, if the costs vary with the level of production.
    4. No. There can be fixed costs of production (e.g. the rent of the factory).

    5. No. This is all explained in detail in my free lectures, and you cannot expect me to type out my lectures again here 🙂

    The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.

    August 28, 2022 at 1:51 am #664482
    Anonymous
    Inactive
    • Topics: 28
    • Replies: 15
    • ☆

    Thanks for your last answer 🙂 I watched your lecture. This is what I understood. Please say are they all correct?

    1) Variable overheads are costs which vary with a change in the level of activity. They are simply the other costs of the product other than material cost and labour cost. Examples include paint, lubrication etc.

    2) Fixed overheads are costs which remain constant with the change in activity levels. Although there can be production fixed cost (as u say) plus non-production fixed cost which includes indirect material, indirect labour, indirect expenses. For example, depreciation on fixed assets, rent of factory, insurance of factory etc.

    3) Semi-variable costs are costs which have both variable & fixed elements. So how do we report their each part in variable & fixed overheads. Should we report variable part into variable OH and fixed part into fixed OH?

    4) There are 4 basic elements of the COGS such as: direct material / direct labour / variable overheads / fixed overheads.

    5) But there can be other categories too in the COGS like (semi-variable cost / direct expenses / other expenses) seperately from those 4 basic costs classification?

    August 28, 2022 at 8:43 am #664497
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54701
    • ☆☆☆☆☆

    1. No. Materials and labour are also variable costs.

    2. Correct

    3. It is only when doing marginal costing that we need to keep variable costs separate from fixed costs, and that obviously included the variable part of semi-variable costs.

    4. OK, but I don’t understand why you are bothered.

    5. No.

    I do suggest that you watch the lectures again.

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

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

  • John Moffat on Relevant Cash Flows for DCF Relevant Costs (example 1) – ACCA Financial Management (FM)
  • John Moffat on Accounting for Management – ACCA Management Accounting (MA)
  • Hsaini on Accounting for Management – ACCA Management Accounting (MA)
  • kennedyavege@2023 on Relevant Cash Flows for DCF Relevant Costs (example 1) – ACCA Financial Management (FM)
  • John Moffat on Relevant Cash Flows for DCF Relevant Costs (example 1) – ACCA Financial Management (FM)

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