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q2) Transfer pricing.. i stated that Division M have a spare capacity of 30k after fulfilling external demand.. so should be valued at variable cost only. Where as 5k is over capacity 60000-65000.. so varable cost plus Contribution lost… and it is prefered that division negotiate between to prices… so that overall company profit is max !
C was 165 something, D was 200 something
@jenny3549 said:
Can you remember what D was? I can’t remember what letter I put or the % but I do remember deducting depreciation.@jenny3549 said:
Can you remember what D was? I can’t remember what letter I put or the % but I do remember deducting depreciation.</blockquote$255000 i think
@abdulazeez44 said:
C was 165 something, D was 200 somethingThat rings a bell now. $165k and $216k? I think I had 165 so C? But I’m not sure, I can’t really remember the question.
@shehzadhussain said:
What about including relevant cost mcq was it all of above of any thing elseWhich one was that?
@shehzadhussain said:
What about including relevant cost mcq was it all of above of any thing elseThere I excuded the cost of harvesting (or what was that, I don’t remember) because the relevant costs in my opinion are the sales before hiring new staff, after hiring and cost of hiring. The harvesting cost should be incurred any way.
@lilit274 said:
There I excuded the cost of harvesting (or what was that, I don’t remember) because the relevant costs in my opinion are the sales before hiring new staff, after hiring and cost of hiring. The harvesting cost should be incurred any way.I remember, yes, that’s what I put too.
Thank you john moffat, your lectures were awesome. Then bpp kit to help me fo well in this exam. I found question 2 and 3 harder than the rest of the exam. The demand equation and marginal revenue and zbb question and activity based costing questions were easy marks. The questions themselves explained the scenario so well that i used the questions to write my answers
@jarekw85 said:
Fixed cost were 800’000 USD – I got them by high- low method from the total overheads, then the variable o/h were as far as I remember 3$ per unit. Overall profit very high, 23mln contribution minus 800k USD fixed costs. Looks should be all right 🙂i think we had similar figures from what i remember except that it was over a three year period so my total fixed overheads where 800k for each year by 3 years. giving me a total of 2.4m. in general section B wasnt that bad hope i did well enough to clear!! all the best everyone
@misschile100 said:
i think we had similar figures from what i remember except that it was over a three year period so my total fixed overheads where 800k for each year by 3 years. giving me a total of 2.4m. in general section B wasnt that bad hope i did well enough to clear!! all the best everyoneBugger, I may not have read the question properly! Was the demand total demand rather than yearly demand? Can’t believe I missed that.
@lilit274 said:
There I excuded the cost of harvesting (or what was that, I don’t remember) because the relevant costs in my opinion are the sales before hiring new staff, after hiring and cost of hiring. The harvesting cost should be incurred any way.i did that too 🙂
jenny 3549 well it said the product would have a life cycle of 3 years (or something like that) and it asked for the profit over the period so i figured that the fixed costs had to be multiplied by 3 to get the total fixed costs for the 3 year period. im not sure if its correct though!
@jenny3549 said:
Bugger, I may not have read the question properly! Was the demand total demand rather than yearly demand? Can’t believe I missed that.i could have been wrong
@jenny3549 what was your profit?
@misschile100 said:
@jenny3549 what was your profit?Total profit I had was $20,080,250 but, as you said, they asked for profit over period. I didn’t read the question properly and assumed the demand equation was based on annual figures!
Really annoyed with myself now. I went into the exam repeating over and over, read the question, read the question.
@jenny3549 i hope my memory serves me right! i could be wrong still. guess we’ll have to wait and see. exams do crazy things to people!
what u guys wrote about ZBB? 9 marks? I said giving priorities to Decision package will be the biggest challenge due to Natural disaster. Than implementing ZBB in one month’s time is quite difficult and so on !
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Q2 was hard 🙁
I really hope that the we werent supposed to calculate profit for the entire life cycle of the product. This wasn’t life cycle costing, and i think its highly unlikely they would be testing two pretty important topics in a 7 mark question. I think the period here would be referring to the year.
Food for thought, if it was for 3 years as you said, would the demand be just 144500 units?
I maybe wrong too :/@ehsanshah said:
what u guys wrote about ZBB? 9 marks? I said giving priorities to Decision package will be the biggest challenge due to Natural disaster. Than implementing ZBB in one month’s time is quite difficult and so on !I rushed question here..put textbook knowledge only and did not relate to senario..bascially just the disadvantages of ZBB
@abdulazeez44 said:
I really hope that the we werent supposed to calculate profit for the entire life cycle of the product. This wasn’t life cycle costing, and i think its highly unlikely they would be testing two pretty important topics in a 7 mark question. I think the period here would be referring to the year.
Food for thought, if it was for 3 years as you said, would the demand be just 144500 units?
I maybe wrong too :/Like I said I might be wrong. And they could have tested anything together to test our understanding of topics.
@abdulazeez44 said:
I really hope that the we werent supposed to calculate profit for the entire life cycle of the product. This wasn’t life cycle costing, and i think its highly unlikely they would be testing two pretty important topics in a 7 mark question. I think the period here would be referring to the year.
Food for thought, if it was for 3 years as you said, would the demand be just 144500 units?
I maybe wrong too :/I think we won’t really know til we can read the question again. Either way it’ll just be one mark lost for the profit figure – everything else would be right.
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