MAC December 2007 OAR

Melegan
Melegan Registered Posts: 16 Dedicated contributor ? ? ?
Hi

I've been doing lots of past papers in preparation for Monday's exam and I think I've been doing ok. But today I've got totally stuck on December 07's paper. Not sure my brain has just had enough cos I don't remember not understanding it last time, but now I am totally confused and starting to panic.

Anyway the problems I have are on Section 2, Task 2.1.

First (a) (iii) fixed o/heads absorbed into production. Can someone please explain to me why the answer if 17,000 direct labour hours x £20? I calculated it as the BOAR would be budgeted o/heads divided by budgeted hours, times by actual production.

Second (b) (v) fixed o/head capacity variance. I have no idea whatsoever where this figure comes from, even though I can see the answer! I thought this was the difference between actual hours for actual production and budgeted hours for budgeted production. Then multiply by the OAR.

I guess the crux of what I'm asking is how is the OAR £20?

Anyone any ideas?

Thanks very much in advance.
x

Comments

  • umerali2003
    umerali2003 Registered Posts: 400
    same here mate i had enough of dec 2007 paper i am not practicing that paper its really shaking my confidence . i heard in that specific paper AAT lowered down the passing rate .. no wonder now why they have done that ..
  • Melegan
    Melegan Registered Posts: 16 Dedicated contributor ? ? ?
    Glad to hear it's not just me. Have been resisting the temptation to rip it into tiny pieces and forget all about it! Think I'll follow your example and not attempt that one again.

    Thanks and good luck.
  • wolfe
    wolfe Registered Posts: 121 ? ? ?
    hi melegan
    £20 is the overhead absorption rate per hour
    while £30 is the oar per unit. this is given in the cost card

    usually oar is calculated by budgeted overheads/budgeted activity
    in this case the budgeted overheads are not given so how can u find it by this formula??
    the oar is directly given in the cost card no calculation needed
  • Londina
    Londina MAAT, AAT Licensed Accountant Posts: 814
    same here mate i had enough of dec 2007 paper i am not practicing that paper its really shaking my confidence .

    same here, I found this paper very difficult, task 1.1 and 1.2 a nightmare! hope I will not get something like this next monday...:001_unsure:
  • umerali2003
    umerali2003 Registered Posts: 400
    @Londina

    my sugession would be to Leave that paper a side ... i spent almost 2 hr on wed to get that task 1.1 and 1.2 into my head i managed to understand the principal of task 1.1 but 1.2 is still giving me trouble so i have stopped messing my head around it ....
  • Londina
    Londina MAAT, AAT Licensed Accountant Posts: 814
    @Londina
    my sugession would be to Leave that paper a side ... i spent almost 2 hr on wed to get that task 1.1 and 1.2 into my head i managed to understand the principal of task 1.1 but 1.2 is still giving me trouble so i have stopped messing my head around it ....

    You are right...but what confuse most in that task 1.1 is that first they told you:

    Materials
    Each game requires the following:
    • one DVD-ROM which costs £500 per 1,000 units
    • a plastic package which costs £0.05 each
    • a special security microchip costing £2


    Then they request you to do:
    Calculate the number of games produced

    but in the answer they only use the microchip values!
    sorry but if first they told a game is made of a dvd rom, a package and a microchip, why not take into account the 3 of those when they request you to calculate the number of games produced? they didn't ask me to calculate the number of microchip only!!
    this drives me crazy, why did they put it in this way the question?!?no wonder I got it wrong!:thumbdown:
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