PCR - Section 2

System
System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
edited 10:27AM in AAT student discussion
I'm not sure if we can discuss answers yet?
On section 2, when calculating the variable labour hours, did you get a whole
figure or a figure to decimal places?
I thought it should be divided by the production figure but that gave me a silly answer, when i divided it by the sales figure i got a sensible answer/
ยซ1

Comments

  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    variable labour rate i mean!
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    i got all variable costs per unit with decimals. need to divide them with production volume instead of sales volume. only the selling price you need to divide by sales voulume. am i right?
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    hi

    I am sure it said work out the flexed budget using the actual sales volume of 500,000 units.
    I hope so because thats the figure I used :?
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    I hope so too, as i based the rest of the calculations on using the 500,000!
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    thats what all the previous past papers have done, thats why i got so confused this time!
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    yes we were instructed for 500,000 thats why we need to divide the actual variable costs to 502,000 then multiplied it back to 500,000 to get the actual costs at 500,000. remember the cost of sales relates to 502 not 500 hence the presence of closing stock which we should remove from our cost of sales to compare 500 sales volume to 500 cost of sales. this is the one i'm also worried when I sat the exam coz its not usual not to get a whole number. maybe AAT is just checking us if we really know our stuff regardless of figures we got.
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    oops,i didn't do that!
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    I used 502 at first but changed to 500. My end profit was 40 different to the one originally prepared which was the value of closing stocks included on the exam paper. Anyone else get this.
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    I used 502 to work out the production cost, wages etc and then used these cost to work out the 500 on the Flexible/Actual budget.I know there was decimal points which was confusing. My variance on the flexible budget was something like 2030F. did anyone else get similar??
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    Im pretty certain the budget prepared in the Question paper is based on absorption costing and the closing stock will include some fixed costs. The idea of marginal costing is not to have any fixed costs in the value of closing stocks in accordance with the accrual concept. so i don't think the end profit should match the closing stock. I based my actual costs on the production for 502,000 and got decimals which confused me loads.
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    i think mine was 1969f
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    I got it to be 40 profit diffeernet at the bottom

    section 2 i was fine on now i know someone else got same answer as me but section 1 god where do i start i think ill be reistting!
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    Section 1 threw me completly, I think I started wrong, but then used that figure all the way through, so hopefully only marked down once for that, but the Budget Operating Statement, I did differant to all my friends, so think I got that all wrong too....
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    I got 1969F as well
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    I used 500 to work out the flexed turnover but 502 to flex the production costs! as the question said to flex on TURNOVER of 500! As production was based on 502 (and you cannot change actual figures)you have to do like for like so had to do 502??? that was my reasoning anyway its driving me crazy as i really believed that was how to do it! Dose anyone know for sure which was correct?????
    x
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    just had a look at a past paper dec 05 question - katz and they did use the 500 way (worked out the price then divided by 502 then x by the 500! way) so I was wrong and they did flex and change the actual as well - i didnt think you could do that???! It makes sense when you look at the answers!!!!
    I have that past paper and have done it so why did it seem so different??
    Im gonna stop banging on about PCR now cause its taking over me life lol x
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    Poo poo. I thought the same as you sam, oh well! (i still dont believe you should adjust actuals! I should create my own rules :lol:
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    Im pretty confident the production costs needed to be divided by 502,000 and then multiplied by 500,000 to get the actual results for production of 500,000 units.

    Thinking about it if the actual results on the question paper were divided by 500,000 there would be no point working out the actual costs for production as the figures in the flexed budget for actual costs would be the same value as the question paper budget. Does that make sense?

    I think either way will pick up marks though. question is , is a stepped cost a fixed cost or variable cost?
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    Well i think all my figure works wrong. What about the written question how to motivate managers what kind of answers did people put for that?
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    Things like letting them participate in budget setting and being accountable etc
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    I put
    1. Let them be involved in the budget setting process
    2. Make the budgeted figures challenging but achievable
    3. Something else which made sense at the time but which I can't remember now.

    Section 1 was the one I struggled with though, got really stressed out doing the operating statements - were you supposed to put a value for opening stock in and if so how do you calculate it? I used a proportion of the cost of production in the end but not sure if that's right. Had about 4 pages of crossing out before I answered that question!!
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    hi new member, there are lots of posts abt the operating statements, whether they shd have stocks in and if yes how were you supposed to calculate them without any info, no one seem to know atm
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    That makes me feel better at least, just have to wait for results day.

    There's no use worrying now and all that...
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    I have been working on my answer but I have not got to grips (yet) with the closing stock value in task 2.1. The question on page 4 gives a total expenses value of ร‚ยฃ10,851,000 (which could mean any value between ร‚ยฃ10,850,500 and ร‚ยฃ10,849,500) for 502,000 units of production.
    I accept that stock valuations do not include distribution costs (because they've not been distributed yet) but I have included warehousing as that is part of the ...present location..definition given in the SSAP9 definition.

    By including Purchases, Wages and Warehousing in the total production cost, the value of the closing stock is bound to exceed ร‚ยฃ40,000.

    I am hoping to see the examiner on Friday, and hopefully understand this better after a chat with him.

    sandy.hood@chichester.ac.uk
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    Section 2

    How did you work out the stepped cost for distributions? I got ร‚ยฃ15 and ร‚ยฃ18 then use this amount to mutilplied 500000/100,000


    Lizy

  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    i got 15k and 18k too
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    I got that too, but was it a variable cost or a fixed cost in the flexible statement? I put it as variable....
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    i put it as fixed!

    not sure which is right, it was a bit if a guess!
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2

    I entered it on the fixed cost.


    Lizy
  • System
    System Posts: 100,534 ๐Ÿค– Admin ๐Ÿค–
    Re:PCR - Section 2
    SandyHood wrote:
    I have been working on my answer but I have not got to grips (yet) with the closing stock value in task 2.1. The question on page 4 gives a total expenses value of ร‚ยฃ10,851,000 (which could mean any value between ร‚ยฃ10,850,500 and ร‚ยฃ10,849,500) for 502,000 units of production.
    I accept that stock valuations do not include distribution costs (because they've not been distributed yet) but I have included warehousing as that is part of the ...present location..definition given in the SSAP9 definition.

    By including Purchases, Wages and Warehousing in the total production cost, the value of the closing stock is bound to exceed ร‚ยฃ40,000.

    I am hoping to see the examiner on Friday, and hopefully understand this better after a chat with him.

    sandy.hood@chichester.ac.uk
    god bless ya sandy looking forward to hearing your findings

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