Pcr Accounting For Losses

zoeeileen

HI hope someone can answer something for me, i have just completed exam December 05, and on task 1.5, it seems to work out the maximum extra production different from what i am used to.

The way that i would work it out is amount needed 2000*100/96 as 4% is faulty.

The way they have worked it out is simply * by a %, can someone please confirm this.


Thankyou all for your help.

Zoe

SandyHood

Zoe

When you know how much material is available you can work out how many units can be made by

1. multiplying by the % that is not lost through wastage
2. dividing by the amount needed per unit

SandyHood

I was tutor at a recent PCR Revision Day in London.

During the day I was concerned about some students and their understanding about wastage.

With just over a week before the exam I hope this helps candidates to identify when wastage takes place so that they can then see how the accounting for wastage should follow it.

Example Apple Pies UK Ltd make apple pies

The apples are delivered by the suppliers
They go into stores
They are issued to production where

1. They are peeled and cored
2. and turned into pulp
3. before beting put into pies
4. and baked

When the come out of the oven some are damaged and cannot be sold
The remainder
then go to finished goods
And are sold

In a typical PCR question we work backwards

1. The forecast sales are stated
2. we find how much to produce by adding the closing stock (FG)
3. subtracting the opening stock
4. to find the number of non-damaged pies we need in stock (good production)
5. we then divide by the good proportion of total production
6. to find how many need to be made
   Materials
7. The material needed to make the pies (apple pulp) is the amount for 1 pie x total production
   But we must recognise that the production process converts apples into this pulp so we gross up to find the total weight of apples (inc peel and core) needed
8. divide by the proportion of apple that becomes pulp
9. This gives us the total weight of apples needed
10. Add closing stock of apples
11. Subtract opening stock of apples
12. To find the weight of apples that needs to be purchased
    multiply by the cost per kg to find the cost of apple purchases

I hope this is a help

zoeeileen

Thankyou both for your help Zoe:001_smile: