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John I have few questions. I am not confirm about answers please correcg me if wrong. You help would be appreciated. Thank you.
Question 1
Is each of the following statements, which refer to documents used in the material procurement procedures of a company, true or false?All goods received notes are prepared in the goods inwards department
All purchase requisitions are prepared in the purchasing department and are then sent to the appropriate suppliers
First is true. Second is false.Question 2
Which TWO of the following statements about cost reduction are true?
Cost reduction improves employee motivationCost reduction happens automatically
Cutting costs in the short term may increase costs in the longer term
Cost reduction measures include crash programmes and planned cost reduction campaigns
Statement 1 and Statement 2 are correct.
Question
Three types of organisation are listed as follows:Airline
Hotel
Hospital
Which of these organisations are likely to use service costing?2 and 3 only
1 and 3 only
1 and 2 only
1, 2 and 3
Answer is D.Why are you attempting questions for which you do not have the answer? You should be using a Revision Kit from one of the ACCA Approved Publishers – they have answers (and explanation or workings).
Q1. Correct
Q2. Statements 3 and 4 are true (not 1 and 2)
Q3. Certainly 1 and 2 are likely to use service costing. Hospitals are likely to use service costing if they are private hospitals, but less likely if they are public (state) hospitals.
Question 1:
I also read that store’s clerk making good received note so why are we here considering that all GRNs are made by Good Inwards.Question 2:
Please explain this cost reduction might reduce cost in short term but increase in long term.Question 3:
Can you please tell which organisation use service costing and which do not? It is confusing like it is upto organisation like they can consider each unit as job costing? This is upto their discretion?
Secondly, you said that private hospital might use service costing but public hospital might not? Can you please tell why?Sorry for abundance of questions!
1. It is the department receiving the goods that will complete the note (which is the goods inward department).
2. There are lots of ways of reducing costs in the short term such as dismissing a lot of staff. However that might result in a backlog of work which might mean employing even more staff in the future.
3. Organisations providing a service (as opposed to producing goods) will use service costing. Public hospitals do provide a service but might not do proper costing (because they are not charging for the service and not calculating profits).
Every service organisation use service costing? Like an accountancy firm which works on request of client will work on Job costing?
Accountancy firms will use service costing to calculate a cost per hour, and then will use job costing to cost out each separate job using the cost per hour they have calculated.
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