Specimen Question number 3 of section B 2014

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January 11, 2016 at 4:31 pm #294133
No way
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What does it mean ” property related” item of Overhead Cost? Because the question says in all case labour rate is 15 per hour, I hv got a bit confused that which labour rate should use?
Thanks
January 12, 2016 at 8:03 am #294182
John Moffat
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Labour is paid at $15 per hour, but that is nothing to do with overheads.
The overheads are absorbed on the basis of labour hours, and so you need to calculate the absorption rate per hour.
Have you watched the free lectures on activity based costing? Our lectures are a complete course for Paper F5 and cover everything needed to be able to pass the exam well.
There are also lectures working through the whole of the specimen exam linked from this page: https://opentuition.com/acca/f5/f5-revision-kit/
January 12, 2016 at 10:45 am #294207
No way
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Can you explain the term Property related? what does it mean?
thanks.
January 12, 2016 at 11:22 am #294214
John Moffat
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It means they are costs to do with the building. However this is irrelevant in the exam because the question tells you how it is to be absorbed.
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