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ECR - June 2010

2

Comments

  • speckled_00speckled_00 Settling In Nicely Registered Posts: 21
    The only reason I didn't put LIFO was that its not used very often as it reports lower profits so you pay less tax on so its not acceptable for HMRC. Saying that though, it IS another Stock Valuation method so depends how they asked the question, I can't really remember...
  • AuntieTAuntieT Feels At Home Registered Posts: 96
    Think I've ballsed up here as well looking at what's been said!

    Stock card FIFO, said AVCO for alternative but went on to talk about FIFO in memo!

    Oh well, as has been said hopefully pick up some marks for talking about it any way!
  • EmilyRushinEmilyRushin Settling In Nicely Registered Posts: 16
    'Auntie T' i did excatly the same as u :( silly me for not reading quesion, im hoping could pick up marks for if what i rote was correct ? do you think! so frustrated!
  • chunk1985chunk1985 New Member Registered Posts: 10
    I passed my simulation easily and then in the exam seems i have cocked up abit. Ive done most of the first section right and most of the second but cocked up on my payback period and email at the end. Firstly I used the discounted amount from my NPV calculations as cash flow (i dont know why) and also didnt see that the payback period was 2 years so my email was just aload of rubbish.

    Now ive just read about the limiting factors question it looks like ive messed that one up aswell.

    I took the whole contribution and divided it by whatever the limiting factor was - ie total contribution divided by labour hours then put that as my answer and then ranked them accordingly and did the same for the other two limiting factors. Was this incorrect ?
  • goldringgoldring Feels At Home Registered Posts: 45
    AuntieT wrote: »
    Think I've ballsed up here as well looking at what's been said!

    Stock card FIFO, said AVCO for alternative but went on to talk about FIFO in memo!

    Oh well, as has been said hopefully pick up some marks for talking about it any way!

    me , the same
  • EmilyRushinEmilyRushin Settling In Nicely Registered Posts: 16
    Im glad i wasnt the only one writing about FIFO hopefully few more do so they take in to account. I did the same with limiting factors using the whole contribution divided by sales..machine..and labour hours
  • beavis182beavis182 Well-Known Registered Posts: 130
    regarding payback period, what did people put for an alternative method.. it was in the email on the final question?

    I did the same for limiting factors and ranked them highest first.. i think the final one was 25.00, 22.75 and 22.50 for labour hours??
  • EmilyRushinEmilyRushin Settling In Nicely Registered Posts: 16
    Irr? Internal rate of return. And yes thats what i got for limiting factors:) ..does anyone remeber if the margin on safety bit was in section1? i hope so cuz i need to make marks up for doing tht lifo bit rong im trying to think what was in section one, the reaportionment, absorption bit lifo ..
  • goldringgoldring Feels At Home Registered Posts: 45
    beavis182 wrote: »
    regarding payback period, what did people put for an alternative method.. it was in the email on the final question?



    I did the same for limiting factors and ranked them highest first.. i think the final one was 25.00, 22.75 and 22.50 for labour hours??


    IRR, as it asked for discounted cash flow method?

    seemed the same as mine for the final limiting factor one.
  • jenny3549jenny3549 Trusted Regular Registered Posts: 472
    beavis182 wrote: »
    regarding payback period, what did people put for an alternative method.. it was in the email on the final question?

    I did the same for limiting factors and ranked them highest first.. i think the final one was 25.00, 22.75 and 22.50 for labour hours??

    I mentioned IRR as the alternative in the memo - and also got exactly the same as you for the last lot for the limiting factor thing.

    As far as the stock bit goes I can't quite remember what the memo asked. I know you had to identify what was in the stock card which was FIFO and then suggest an alternative but I can't remember the point of the memo - I think I wrote about FIFO and it being something to do with higher reported profits.....

    I seem to have got a different payback period to others - can anyone remember the cashflow - I know I had 220000 over whatever was the second year but I can't remember what it was so I'm not sure if I just made a silly calculation error.
  • beavis182beavis182 Well-Known Registered Posts: 130
    3rd year was 175000 i think :-) i nearly missed the disposal in the final year but seemed pretty straight forward
  • EmilyRushinEmilyRushin Settling In Nicely Registered Posts: 16
    jenny3549 wrote: »
    I mentioned IRR as the alternative in the memo - and also got exactly the same as you for the last lot for the limiting factor thing.

    As far as the stock bit goes I can't quite remember what the memo asked. I know you had to identify what was in the stock card which was FIFO and then suggest an alternative but I can't remember the point of the memo - I think I wrote about FIFO and it being something to do with higher reported profits.....

    I seem to have got a different payback period to others - can anyone remember the cashflow - I know I had 220000 over whatever was the second year but I can't remember what it was so I'm not sure if I just made a silly calculation error.

    I did exactly the same as you carried on writing about FIFO and higher profit if any one can tell me what the question was for the memo tht wud be excellent?
  • Danielle220188Danielle220188 Just Joined Registered Posts: 3
    oh my, i got the same answers for the margin of safety bit and then crossed them all out and did something else damn it!! So annoyed with myself.
  • babsababsa Well-Known Registered Posts: 118
    The payback was 1 year and 220/290 = 1.759 years.

    or 1 year 220/290 x 12months = 1 year 9.10months.

    The company policy was 2 year so extenting the payback to 3 years wouldn't have any effect on the proposal.
  • babsababsa Well-Known Registered Posts: 118
    What is anyone put for the reason the overhead absorbed was over.

    It took me all my time to say it was over working out the figures I were fine but then saying if it was under or over was a different matter. I came to the conclusion it was over but then the threw me by asking why?

    please help
  • babsababsa Well-Known Registered Posts: 118
    last year the exam paper was on the internet but the answer only went on line when the results went out.
  • jenny3549jenny3549 Trusted Regular Registered Posts: 472
    babsa wrote: »
    The payback was 1 year and 220/290 = 1.759 years.

    or 1 year 220/290 x 12months = 1 year 9.10months.

    The company policy was 2 year so extenting the payback to 3 years wouldn't have any effect on the proposal.

    Thanks Babsa - you're a star! I was doubting myself and couldn't remember the figures. That's what I had so that's a relief.

    One thing I'm dying to know now though is a previous mention by another poster - is it true that the answers will be online in 8 days??????
  • AuntieTAuntieT Feels At Home Registered Posts: 96
    babsa wrote: »
    The payback was 1 year and 220/290 = 1.759 years.

    or 1 year 220/290 x 12months = 1 year 9.10months.

    The company policy was 2 year so extenting the payback to 3 years wouldn't have any effect on the proposal.

    I thought the NPV was -ve after two years so not good - after 3 was ok so go with it!
  • jenny3549jenny3549 Trusted Regular Registered Posts: 472
    babsa wrote: »
    What is anyone put for the reason the overhead absorbed was over.

    It took me all my time to say it was over working out the figures I were fine but then saying if it was under or over was a different matter. I came to the conclusion it was over but then the threw me by asking why?

    please help

    Over absorption can happen because either:

    The budgeted overhead figure used to calculate the rate of absorption was higher than the actual overheads turned out or be or:

    The actual machine or labour hours worked were higher than the budgeted hours.
  • speckled_00speckled_00 Settling In Nicely Registered Posts: 21
    jenny3549 wrote: »
    Thanks Babsa - you're a star! I was doubting myself and couldn't remember the figures. That's what I had so that's a relief.

    One thing I'm dying to know now though is a previous mention by another poster - is it true that the answers will be online in 8 days??????

    I thought that the paper becomes available within a week or so but not the answers......
  • smithy44smithy44 Feels At Home Registered Posts: 31
    goldring wrote: »
    me , the same

    think i balls up on the record card too i did AVCO and wrote about FIFO looks like i didnt read it right thought with the increasing prices on the receipts that FIFO is a the alternative method to use as it increases the profit in times of rising prices. Oh well never mind!!!!!!!!
  • skeske Just Joined Registered Posts: 2
    I dont know whether registering to come on this forum was a good idea or not lol Might wanted to have just waited for my results!

    The break-even question really threw me off with marginal and fixed costs! Im 100% sure i got that wrong! Which means the questions on the other side are wrong because i quoted the wrong figures!

    I had FIFO for the stock card and the question about an alternative method of stock valuation was worded something along the lines of 'in practise' so although there are 2 other methods to have chosed, i think you needed to pick the right one as to what companies would actually use in day-to-day life.

    I had 1 year 9 months for payback and an alternative was IRR.

    I wish they had put a really long wordy re-apportion question in to make up some extra marks lol Instead i thought it was quite spoon fed as to how things needed to be apportioned dont ya think?
  • EmilyRushinEmilyRushin Settling In Nicely Registered Posts: 16
    i agree with you reaportionment is one of the easiest possible! what do you think should of been writeen about in the memo?!which method x
  • Pickle03Pickle03 Just Joined Registered Posts: 1
    I couldnt find any names to use for the memos, doesnt it usually tell you who you are and who your manager is? What did everyone else put, or was I just being stupid?!
  • smithy44smithy44 Feels At Home Registered Posts: 31
    We were told just put the position they said you were and sign it your own name if they didn't give you a name.
  • slugbugslugbug New Member Registered Posts: 10
    Met up with my class ( 60 odd) of us today for the second exam ....at least a third of us wrote the memo on Fifo so feel better about it now!
  • snowmaraudersnowmarauder Feels At Home Registered Posts: 99
    The only reason I didn't put LIFO was that its not used very often as it reports lower profits so you pay less tax on so its not acceptable for HMRC. Saying that though, it IS another Stock Valuation method so depends how they asked the question, I can't really remember...

    I said LIFO, because the prices of the units were going up everytime, and if you use that method it gives a more realistic profit against the current prices of you stock in the period. Its def. in the past exam papers.

    AVCO is the one I understand that hmrc dont like because its the average and doesnt give a true value to purchased materials in the relevant time period, so some of the price comes from one period and is then passed to the next, doesnt give a true relevant figure. i think that probably the only thing i did right. cant even remember the rest. ha ha, got pay back 1.75, i just worked out where they hit the 400.
  • snowmaraudersnowmarauder Feels At Home Registered Posts: 99
    think i got the same as you, but coulnt remember the alternative xx
  • snowmaraudersnowmarauder Feels At Home Registered Posts: 99
    overheads absorbed. i said it was because they hadnt budgeted enough for labour hours I think. :0)
  • basilbasil Feels At Home Registered Posts: 33
    babsa wrote: »
    The payback was 1 year and 220/290 = 1.759 years.

    or 1 year 220/290 x 12months = 1 year 9.10months.

    The company policy was 2 year so extenting the payback to 3 years wouldn't have any effect on the proposal.


    yep this is what i have got, but bear in mind it doesnt mean i have passed it lol...
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