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Hi
I am trying to solve budgeting question it is in BPP study text, page 486 Mcdreamy question- it says prepare flexible budget statement on the assumption that the company operates at 85% of capacity. They have calculated direct material and direct wages cost per unit by total cost/no of units but when they are calculating production overhead they are taking off from one year to another year the then difference is dividing with current year number of units. Why is that?
Please someone help meHey, I didnt check the question, but from what I know, The Production overheards may be a Semi-variable cost. If they seem to be increasing by only a small amount compared to the initial value given. Which is why we use the high-low method to determine the variable price/unit and the fixed costs.
Thanks a lot. one more thing Flexed budget and Flexible budget is same to solve or it is different?
Kinda the same thing, only a little difference,
Flexibile Budgets are made at different levels of output at the start of the year, to see the differences
Flexed budgets are Adjusted to be level with ACTUAL output, to compare it.
So basically, Flexed = Actual output
Flexible = Different levels of output.
Thank you 🙂
My exam is tomorrow, any last minute advice on particular topic or in general?
Brother, Im giving it too tomorrow 😀
All I can say is, Dont focus on any one topic, They did clearly say that the entire syllabus is equally important, Although if you want to gain speed in the section C, try the past papers, and the Mocks in the revision kit. If you can get speed in the big marks, you will be under less pressure.Good luck for tomorrow 🙂
It is still the same pressure, so it Doesnt mean you cant get worried :), Good luck, Hope you pass with ease. 🙂
BTw one more doubt if you don mind helping 🙂
Question Mic co -222 In BPP revision kit,
1) why did they calculate Incremental time in one month
2) Why did they take 2 batches In August, 4 In September and 8 in October but in question it says 1 in Augusts 2 in September and 4 in October?
3)When do we have to calculate incremental time in question? How would we know?Thanks
The question asks us to find the labour cost per month, That can be found only if we know how many hours per month they have taken to produce the units.
We take batches as 2,4,8 etc because the question only tells us about how many were produced in the individual month, and for us to know the hours using the learning curve, we need to accumulate them, as learning curve only applies when output doubles.
When we do that we find average hours per batch. Then we add all the months to find the total hours worked, then we have to find how many hours were worked in each month to find the labour costs.You use incremental time when the question asks to find labour cost PER MONTH.
I hope my words were clear enough, if you dont get it, tell me and i will try to explain better.
@azamali said:
Brother, Im giving it too tomorrow 😀
All I can say is, Dont focus on any one topic, They did clearly say that the entire syllabus is equally important, Although if you want to gain speed in the section C, try the past papers, and the Mocks in the revision kit. If you can get speed in the big marks, you will be under less pressure.Good luck for tomorrow 🙂
I agree with @azamali! In the Syllabus and Guide they have clearly mentioned the structure of the exams allows examiners to test wide area of the Syllabus in the exam so you can’t pick and choose!
However, also expect to see some topic questions in more majority than the others…and there might be topics that are not tested at all… So don’t want to be in a situation where you studied a topic well and neglected another but ended up getting nothing on the topic which you are prepared well for and getting questions more on the neglected topic.
I gave my exam in June ’18 and got only handpicked topics…in vast majority.
So expect anything. Keep in mind that the paper will be challenging and tricky but convince yourself that u have prepared well and will pass!
Dont forget to read the question properly and use the highlight tool to highlight important points!
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