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Hi,
The question has mentioned under current system, the variable costs/unit (total variable cost) of Goblin as being $622.5 and Fountain as $103.75.
In past papers solution for part (b), could you please explain how the variable overhead cost has been calculated individually for material/labour related variable overheads??Thanks.
Total material costs = 450 + 150 + 1,200 = 1,800,000
30% of TOC relate to material ie 720,000. This will be absorbed using material costs.
Therefore TOC per fountain relating to material = 450,000/2000 x 720,000/1,800,000 = 90. Similarly for labour and the GoblinHi,
I have just attempted this question. But I notice that it is a 2008 question, which means it was the previous examiner. This examiner’s questions do not have a lot of calculations like this one.Am I correct in saying that this is an old style of questioning and we should not expect a similar question from the current examiner?
I would really appreciate your response.
It was principally the style of Q1 which really changed with the new examiner and massive, complex calculations are not expected there.
I would say that the question TOC that you refer to contains as much calculation as you should ever expect in a question but is not beyond possibility. Look, for example at Q3 June 2014 where the is a fair amount of calculation.
Activity based costing usually means some reasonably long calculations. It might be more likely now to present you with the analysis already performed then ask you to comment on it, but that must involve understanding how the figures were arrivd at.
Dear Tutor,
You mentioned Q3 June 2014 but I think it is Q4 you meant, which I have attempted. Thanks.I have also attempted Q3 and I think it is a good question for Risk.
After attempting that Godel question, I am confident enough on any question he can bring on evaluating a budgeting system and evaluating a move to beyond budgeting. Thanks. If he can make that mistake of bringing such a question, he will know my name!!
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