I will Help!!!!

wolfe

thanks u r an angel

111beckstar111

Okay, first let's start with NIC

People who are employed under the PAYE pay NIC at 11% These are Primary Class 1 Contributions.

Employers who employee people on a payroll pay NIC of 12.8% these are defined into 2:

Class 1 Contributions - these are at 12.8% of each employees gross pay....employees are entitled to earn £105 per week before paying NIC

Class 1A Conributions - these are at 12.8% on benefits in kind..

So for example....if an employees earns £479 per week and has use of a car and the benefit is £3120

The employer will pay

Class 1 - (479-105) x 12.8% (per week)

+

Class 1A £3120 X 12.8% = £399.36


If you are a sole trader/partnershp (not under PAYE) you pay -
Class 2 which are £2.30 per week unless you claim the small earnings excepion which is profits under £4,825 and Class 2 or 4 need not be paid

Class 4 - People who have profits over £5,435 are liable to pay Class 4

it is 8% on profits between £5435 and £40,040...therefore if you have profits of £6000 you are liable to pay Class 2 at £2.30 per week = £2.30 x 52 = £119.60

and also Class 4 - take your profits of £6,000 - £5,435 = £565 x 8% = £45.20

If your profits exceed £40,040 you pay them a 1%...

HOPE THIS CLEARS UP NIC.....

111beckstar111

BADGES OF TRADE are tests to help ecide whether HMRC believe an activity should be classed as traing. (therefore they will have to declare it and pay tax if it is trading!)
There are 6 badges of trade: -

PROFIT MOTIVE
briefly are they out to make a profit, if they are this indicates trading!

SUBJECT MATER OF THE ACTIVITY
does the individual use it for personal use, if not then they are deemed to be trading

LENGTH OF OWNERSHIP
If items are sold quite quickly, they are deemed to be trading!

FREQUENCY OF TRANSACTIONS
If there is a series of similar ransactions they are deemed to be trading

SUPPLEMENTARY WORK
Do they make repairs to the item or work on them o update or renew them? If so they are deemed to be trading

REASONS FOR ACQUISTION AND SALE
If the individual has a deemed purchase and sale ...i.e has an intention to sell....it s deemed trading...

Hope ths helps!!

Primble

how do you keep so much info in your brain without it turning to mush

diamondavid

can u tell me all of the PEV ratio and the formula please?

111beckstar111

]Yes No probs -

GROSS PROFIT MARGIN

GROSS PROFIT / SALES X 100

NET PROFIT MARGIN

NET PROFIT/SALES X 100

OPERATING PROFIT %

OPERATING PROFIT / SALES X 100

EXPENSES AS A % OF SALES

EXPENSES/SALES X100

RETURN ON CAPITAL EMPLOYED

OPERATING PROFIT / CAPIAL EMPLOYED X 100

NTEREST COVER

OPERATING PROFIT / INTEREST

ASSET TURNOVER

TURNOVER / FIXED ASSES + NET CURRENT ASSETS

CURRENT RATIO

CURRENT ASSETS/CURRENT LIABILITIES

GEARING

LONG TERM DEBT / CAPITAL EMPLOYED (THERE IS OTHER OPTIONS AVAILABLE BUT I PREFER THS ONE)

QUICK RATIO - ACID TEST RATIO - LIQUID CAPITAL RATIO

CURRENT ASSETS - STOCK / CURRENT LIABILITIES

CREDITORS PAYMENT PERIOD IN DAYS

TRADE CREDITORS/ TRADE PURCHASES (OR COST OF SALES) X 365 ... OR 12 FOR MONTHS

DEBTORS COLLECTION PERIOD IN DAYS

TRADE DEBTORS/ CREDIT SALES X 365....OR 12 FOR MONTHS

STOCK TURNOVER IN DAYS

STOCK/ COST OF SALES X 365 OR 12 FOR MONTHS

RETURN ON NET ASSETS


OPERATING PROFIT/NET ASSETS

AVERAGE AGE OF STOCK

0.5 X (OPENING STOCK + CLOSING STOCK) (THERE IS OTHER OPIONS AVAILABLE)

COST PER UNIT

COST/UNIT

CONTRIBUTION MARGIN

CONTRIBUTION / TURNOVER X 100

EFFICIENCY RATIO

STANDARD HOURS FOR ACTUAL PRODUCTION / ACTUAL HOURS X 100

CAPACITY RATIO

ACTUAL HOURS/BUDGETED HOURS X 100

ACTIVITY RATIO

STANDARD HOURS FOR ACTUAL PRODUCTION/BUDGETED HOURS X 100

PROUCTION VOLUME RATIO

ACTUAL OUTPU/ BUDGETED OUTPUT X 100


HOPE THIS HELPS!!

111beckstar111

HAHAH PRIMBLE.....I don't to be honest

cs_1988

Hi beckstar,

Very kind of you to give up your saturday!

Sitting PEV tomorrow, fairly confident, but one area i just cant find/understand in my book is how to explain fixed overhead variance, what they mean and show?

ANy Ideas?

Cheers in advance,

Chris

troy

Wow!
Do you think you missed any? LOL
:001_tt2:

111beckstar111

No problem I am sitting PEV tommorrow aswell so helps me out....

When you say fixed overhead variance are you refering to:

Fixed overhead expenditure variance

Fixed overhead volume variance

Fixed overhead efficiency variance

Fixed overhead capacity variance

Ge back to me just to verify ths is what you mean and I'll answer your question

111beckstar111

Hi Troy....I was revising them last night so I'd fort I'd list all of them that they could throw at us lol

Primble

lol people are studying so hard they dont know what day it is. dam exams.
i'm so not doing distant learning next time

cs_1988

Yeah all of them, Fixed overhead Expenditure is obvious, but the other three. Calculating them is no problem, explaining what they mean is another story!

Yeah, got three exams this week, you? Actually looking forward to PEV and PCR, not so much dfs!

diamondavid

sorry to bother you again, but can u tell me what each ratio mean(gd or bad etc) TYVM

Primble

i'm picking you brains again too. on btc can you please explain FYA, AIA, WDA

111beckstar111

Hey cs

Fixed Overhead Expenditure Variance

This variance shows whether actual spending on fixed overheads was more than budgeted if adverse or less than budgeted if favourable. Reasons for variance could include poor budgeting or that actual costs are different due to unforseen price changes. Because these overheads are "fixed" it cannot be due to different output.

Fixed Overhead Volume Variance

this shows the difference between the overheads that would be absorbed by the planned volume of output and the amount absorbed by the actual output. The breakdown of this variance into Efficiency and capacity explains why there had been higher or lower output than the budget forecast.

Fixed Overhead Efficiency Variance

this variance shows how the efficient use of resources effects the volume of output. Favourable = output has been created using less resources than had been expected and quicker than bugeted for. May have worked more efficient due to better materials, better trained labour etc

Fixed Overhead Capacity Variance

this variance shows how the amount of resources used compared with the budget affects the volume of output. Favourable = is when they have over absorbed - more resources have been used therefore spreading the fixed overhead costs more widely. may have produced more due to bad budgeting, better raine teamforce etc

Hope that helps!

Yes I have PEV, BTC and PTC...I just want to ge them out the way lol

Chris023

I have got PCR and PTC Beckstar

How are you finding PTC? I am finding it the worst one of the lot! So many niggly little rules to remember. I think I have just got the hang of section 1. Going over section 2 now

cs_1988

Thanks beckstar

Londina

If the question ask:

calculate fixed production overheads absorbed into production

would you work out that is was the standard fixed overheads for actual production?

I messed up a question because I didn't understand what was actually required!

111beckstar111

Hey david - i will try to do my best

GROSS PROFIT MARGIN, shows how much gross profit you have as an % - the higher the better , we want it to increase over time.

NET PROFIT MARGIN, shows how much net profit you have as an %. the higher the better , we want it to increase over time. If it is low it s generally due to costs arisng.

OPERATING PROFIT % shows how much operating profit you have as an %, his is before interest charges and tax. It is the final figure of what you have made!

EXPENSES AS A % OF SALES, shows a expenses as a % of your turnover....how much of your turnover was spent on tha exact expenses, helps planning an reducing costs

RETURN ON CAPITAL EMPLOYED

The return as a % you get on your money employed - generally want this to be high and increasing over time.

NTEREST COVER

shows how many times you can afford to pay your interest, want this high so we can afford interest payments if not the company is in bother

ASSET TURNOVER

is the number of times the value of the assets has been obtained in sales.

CURRENT RATIO

i shows the number of times that the curren liabilites are covered by the current assets. ideally 2:1

GEARING

shows how much as a % the company is finanaced by debt want this to be as low as possble preferably below 50%

QUICK RATIO - ACID TEST RATIO - LIQUID CAPITAL RATIO

shows that the current liabilities can be covered by the companies current assets excluding stock beacuse that is the least liquid current asset. The guide is 1:1

CREDITORS PAYMENT PERIOD IN DAYS

how long it take sus to pay suppliers, try and make terms so that the company gets as long as possible to help cashflow

DEBTORS COLLECTION PERIOD IN DAYS

how long it takes for debtors to pay us - want this as soon as possible in order to improve cashflow - money is better in our pockets than thers!!!


STOCK TURNOVER (IN DAYS or months)

shows the number of times per year that the stock is turned over or sold. the result can also be the average holding of stock in days or months.


RETURN ON NET ASSETS


the amount of return you get back on your net assets. want this to be fairly big

COST PER UNIT

dividing the cost by a unit e.g. materials cost by 100 units



HOPE THIS HELPS!!

lucy1988

Hi,

I always get confused in BTC with the different rules for Income tax and Corporation tax can you help me with the different rules?

Thanks

zoeeileen

PEV Volume Variance

Hi Hope you dont mind me asking.

But with the fixed overhead capacity variance, and the efficiency variances i am normally fine working these out, but i keep getting caught out with the volume variance.

The Fixed overhead volume variance is broken down into efficiency & capacity just wondering if there is a good way of working out the volume if you know the efficiency & capacity.

Also with the lifecycle costing, can depreciation be involved if it can how can we deal with this.

Thankyou very much for your help.

Zoe, Good luck to all tomorrow:001_smile:

111beckstar111

Primble, sorry i'm late on replying

AIA - ANNUAL INVESTMENT ALLOWANCE
This can be claimed up to £50,000 per year, it applies to all plant and machinery except CARS
Any acquisitons that exceed 50,000 wll be dealt with through the pool.

This allowance will need to be apportioned for shorter CAP'S

FYA - FIRST YEAR ALLOWANCES
These are 100% Only for low emission cars 110 g or lower. These are added on to AIA Claims and Capital Allowances worked through the pool

WDA - Writing Down Allowances 20%

Theseare for assets that enter the pool.

20% is allowable for the main pool and 20% or £3,000 which ever is lowest for expensive cars
These also nee to be apportioned for llong CAP'S I.e longer than 12 months

If you have any more problems I'll try o answer them.

111beckstar111

Chris

Finding PTC the best actually, not revised too much though saving that for Wed and Thurs !!

111beckstar111

Londina,
quite possibly but I don't quite get that myslef....f you tell me the quesion and answer I'll try to get back to you with a better answer...

111beckstar111

Ino t is quite tricky to remember this especially if you are doing both exams like me!!
PTC - Income Tax

Personal Allowance 6035
Using tax bands 20% - 40%

Capital Allowances (INC AIA +FYA)

CGT:

Annual Exempt Amount £9,600
Rate of 18%
Part Disposal Rules
Chattel Rules
Improvement Expenditure
Shares
Gift Relief
Rollover Relief
Entrepreneurs Relief




BTC -Corporation Tax
Marginal Relief
Corporation Tax Profits 21%, 28%

Capital Allowances (inc AIA, FYA)


Indexation Allowance
Part Disposal Rules
Chattel Rules
Improvement Expenditure
Shares (Remember the indexation)
Rollover Relief

That's all I can think of atm!!!

Need any more help let me know!!

111beckstar111

Hi Zoe

Yes if you know the fixed overhead capacity variance, and the efficiency variance... I just make i easier for myself and take one of the other.

Or I take the standard hours for actual production - budgeted hours and mutliply by the absorpton rate.

All 3 link you see:)

zoeeileen

Thanks

Thankyou very much for your help worried about tomorrow.

Zoe

111beckstar111

Don't be - your'll be fine

block15

In PEV, I'm a bit confused by currency variances. I think it has only come up in Dec 05 (maybe due to come again .. ??). Is this the right formula as my notes from class are a bit vague :001_unsure:

Actual quantity x (standard price - standard price at new rate) = variance due to currency

Actual quantity x (standard price at new rate - actual price) = variance due to other reasons

Osbourne only has one little question on it so I just want to check in case :thumbup1: