PEV, Nov04, Q 2.2

Registered Posts: 95 Regular contributor ⭐
Hi

Can anyone please tell me how to work out the materials figure for the revised p/l acc?

Thank you :001_smile:

• Registered Posts: 95 Regular contributor ⭐
oh and the direct labour and s and d costs! Really stuck on this one!!
• Registered Posts: 158 Dedicated contributor 🦉
Hi Lala

I will ry to help you now, what is the name of the company it uses?
• Registered Posts: 56 Regular contributor ⭐
The materials one is 40% of factory A's materials costs which is 660x40% = 264, add that onto the 784 for factory B's materials which is 1048. Then take the 5% off that total for the savings which comes to 995.60.

Direct labour is the same, 40% off factory a's labour is 176 add 448 for factory b's labour which is 624.

Someone else will have to help with the s&d costs cos im stuck myself!
• Registered Posts: 95 Regular contributor ⭐
Thank you so much Joe, think I have been revising for too long!!!

Thanks Beck, it's Duo Ltd? If you know the answer the S&D costs that would be brill!
• Registered Posts: 95 Regular contributor ⭐
Ok, it says the sales and dist costs rise in line with turnover. So I worked out S&D costs for the original factory B to be 22.46% of the original turnover. So if I do 3730 x 22.46% I get £837.76! Almost! Maybe they rounded their answer? Workings would have been helpful in the model answer!!!
• Registered Posts: 95 Regular contributor ⭐
ooooops just found the workings on the next page - my bad!
• Registered Posts: 56 Regular contributor ⭐
haha, time for a nap me thinks!
• Registered Posts: 158 Dedicated contributor 🦉
Got it!

Sales - 2200 x 40% = 880 + 2850 = 3730

Material - 660 x 40% + 784 = 1048 x 5% = 995.60

Direct Labour - 440 x 40% = 176 + 448 = 624

Fixed Production Costs - 420 + 100 = 520

Cost of Sales therefore 2139.60

and Gross Profit 1590.40

Sales and distribution is 640/2850 x 3730 = 837.6 (it says its variable with turnover therefore dividing the cost by Factory Bs old sales and then multiplying this by the consolidate sales (A+B)

Admin Costs - 250 + 60 = 310.00 (the £60 is suggested in the note from factory manager

Don't forge to read everything guys :001_smile:

hope I helped
• Registered Posts: 95 Regular contributor ⭐
Nice one Beckstar!! Are you taking the exam on Monday?:)
• Registered Posts: 158 Dedicated contributor 🦉
Yes PEV on Monday
BTC on Tuesday
and PTC on Friday

Just want to do them now and get them out the way!!!

• Registered Posts: 95 Regular contributor ⭐
Definitely need a nap now! Think maybe it's time to call it a day - I have been revising since 10am............
• Registered Posts: 95 Regular contributor ⭐
I know what you mean Beck. Same exams as you except DFS on Wed.

All the best with the exams!
• Registered Posts: 158 Dedicated contributor 🦉
You too, if you need any help I'll try and help you.

Makes revising for these exams,.. lets say better
• Registered Posts: 95 Regular contributor ⭐
Thank you - that would be great! Likewise, if you're stuck with anything I will do my best to help not long to go now....:)
• Registered Posts: 158 Dedicated contributor 🦉
Well I'll be on here all tonight and tommorrow so give me a shout if you need my assitance, it would be a pleasure
• Registered Posts: 95 Regular contributor ⭐
Aww you're a star! I'm gonna sign off in a bit as it has been a long day, but I'll be back on 1st thing tomorrow so be prepared hehehe bye for now
• Registered Posts: 158 Dedicated contributor 🦉
Okay, no probs see you tommorrow :thumbup1: