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Urgent help needed on this question

Forums › ACCA Forums › ACCA MA Management Accounting Forums › Urgent help needed on this question

  • This topic has 5 replies, 3 voices, and was last updated 14 years ago by Anonymous.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • February 9, 2011 at 2:35 pm #47348
    maes
    Member
    • Topics: 24
    • Replies: 52
    • β˜†β˜†

    Hi,

    Could someone shed some light on this question please?

    A company manufactures and sells a single product. Int two consecutive months the following levels of production and sales in units occured:

    Month 1 Month 2
    Sales 3800 4400
    Production 3900 4200

    The opening inventory for month 1 was 400 units. Profit and losses have been calculated for each month using both absorption and marginal costing principles.

    Which of the following conbination of profit and losses forthe two months is consistent with the above data?

    Absorption costing profit/(loss) Marginal costing profit/(loss)

    Month 1 Month 2 Month 1 Month 2
    $ $ $ $

    A 200 4400 (400) 3200
    B(400) 4400 200 3200
    C 200 3200 (400) 4400
    D (400) 3200 200 4400

    According the the answers, C is corret but why?

    Thanks in advance

    P.S The layout isn’t how i wanted it to look, the question is on page 28 on the f2 lecture notes. πŸ™‚

    February 9, 2011 at 3:03 pm #77117
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10595
    • β˜†β˜†β˜†β˜†β˜†

    If closing inventory is higher than opening inventory, then TAC profits will be higher than MC profits. In Month1 , inventory increases form 400 to 500 and only solutions A and C show TAC>MC.

    If closing inventory is less than opening inventory then TAC profits are lower than MC profits. In Month 2, inventory falls from 500 to 300 and of the A and C solutions still left after month 1, only solution C has TAC

    February 9, 2011 at 3:49 pm #77118
    maes
    Member
    • Topics: 24
    • Replies: 52
    • β˜†β˜†

    Thank you. Is this discussed in any of the online lectures?

    Thanks!

    February 9, 2011 at 4:37 pm #77119
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10595
    • β˜†β˜†β˜†β˜†β˜†

    Try here:

    February 9, 2011 at 5:10 pm #77120
    maes
    Member
    • Topics: 24
    • Replies: 52
    • β˜†β˜†

    Thanks!

    May 12, 2011 at 9:55 pm #77121
    Anonymous
    Inactive
    • Topics: 0
    • Replies: 1
    • β˜†

    could any buddy help me out frm this prblm?????

    Mulder Ltd manufactures 2 products – X & Y with the following unit costing:
    X Y
    Selling price 20 15
    Variable costs 14 5
    Contribution $6 $10

    Labour usage
    2 hrs
    4 hrs
    Material usage 5 kg 3 kg
    Maximum demand:
    3,000 unit
    12,000 unit

    If labour hours are restricted to a maximum of 8,000 hours, and material is restricted to a maximum of 13,000kg, what is the optimum production schedule?

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