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Anyone can check for me that they provide correctly question which writes : ” If the overhead for the previous accounting year were re-allocated under ABC principles then the results would be that the overhead allocation to CB would be $0.05 higher at $2.35 per unit and the overhead allocated to TJ would be $0.3 lower at $3.65″
Are they wrong with which is higher and lower value?
They are comparing the ABC overheads with the traditional overheads – not comparing the two products.
So CB is 0.05 more than it was before they changed to ABC.
@ John Moffat
Traditional overhead allocation as it says in the question @ F5 BPP exam kit 2012:
Overhead
CB: $2.4 per unit
TJ: $4.0 per unitthat means if changing to ABC allocation method for CB 0.05 higher = 2.4 + 0.05 must be = 2.45; for TJ lower 0.3 must be =4.0-0.3= 3.7. But the question says CB@ 2.35, TJ@ 3.65.
There are something wrongs in here!PS: If u have the examkit, pls open and check it for me. Additionally, in the answer they provide wrong value for TJ =3.95 instead of 3.65.
Part (a) refers to the accounting year just completed, and for that year the overheads were absorbed on machine hours and were 2.30 and 3.95.
The question says that if they had done it using ABC then overheads would be 0.05 higher for CB (so 2.35) and 0.30 lower for TJ (so 3.65).
For part(a) you are not required to do any arithmetic – just to explain whey they are different.Part (b) is looking at next year and so the overheads next year are different both traditional and ABC.
Yes you can. Just make sure you download the 2012 real exams from the ACCA website.
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