MAC June 2007 Help

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A-Vic
A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
Hi All

Wonder if anyone can help with the ratios in task 2.2

Am getting most of the division p calculations correct but when it comes to Nfen am way out for example

Division P Nfen
Gross profit margin 26.00% 84.67%
Net profit margin 13.50% 13.56%
Advertising costs as a percentage of turnover 2.08% 66.67%
Fixed overheads as a percentage of turnover 50.00% 10.00%

however i get

26.00 % _ 25.50%
13.50% _ 40.67%
2.08% _ 200%
50% _ 30%

i think am missing something daft but if someone can point me in the right direction please been working on this for over an hour.

Thanks in advance

Vic
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  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    worked it out i missed a zero and calculated by units and not sales dohhhh me
  • meibaker
    meibaker Registered Posts: 481 Dedicated contributor 🦉
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    a vic, how did you calculate teh 1.2 overtime available and surplus per month.
    thanks
  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    Hiya

    Ive done it on word lemme know if this helps
  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    and sorry about spelling lol
  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    sorry missed month one on recalculation
  • meibaker
    meibaker Registered Posts: 481 Dedicated contributor 🦉
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    fantastic explain! thank you very much a vic!!!
  • jewels.p
    jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
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    Those of you doing MAC

    For all those doing MAC past papers!

    Upped this as I was completely stuck and found it on a search

    How the hell did you understand that Vic? I was totally confused with that one. Lets hope there isnt a confusing one like that in the exam! :confused:
  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    jewels.p wrote: »
    For all those doing MAC past papers!

    Upped this as I was completely stuck and found it on a search

    How the hell did you understand that Vic? I was totally confused with that one. Lets hope there isnt a confusing one like that in the exam! :confused:

    which bit Jewels?
  • jewels.p
    jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
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    Its ok Vic I printed off your word document and get it now but never would have in an exam!

    I am now stuck on the FO Volume Variance in Section 2. (As you will probably have guessed I should be working but am attempting a past paper)

    I thought the Volume Variance was Budg Prod in S.H less Act Prod in S.H x SAR so how come in the answer it is 500,000 units less 540,000 x SAR (How change in hrs worked affects output or production) where does the hours come into this?
  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    Am a little confused by this also
  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    i get it now because its absorbed by unit production you just divide budget by the units then times it by the difference.

    e.g

    £100,000 / 500,000 units = 0.20p

    so difference = (500,000 buget - 540,000 actual) x 0.20 = 8000 fav because they managed to produced more units they absorbed more of the overhead cost
  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    Although i did have to look at the answer and work it back but now i think it will stick for volume variance on unit based
  • jewels.p
    jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
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    Yeah but what about the hours? Are hours only involved if F.O are absorbed using hours but just units if they are absorbed using units produced?
  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    jewels.p wrote: »
    Yeah but what about the hours? Are hours only involved if F.O are absorbed using hours but just units if they are absorbed using units produced?

    If units all you do is work out the absorption rate by dividing the budget overhead by the budget units expected.

    £100,000 / 500,000 units = 0.20p(this is then your overhead absoption rate based on units) i think maybe it could be better explaned by someone else sorry am not very clear
  • jewels.p
    jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
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    Sandy where are you?
  • jewels.p
    jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
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    Can anyone help with this please?
  • Rinske
    Rinske Registered Posts: 2,453 Beyond epic contributor 🧙‍♂️
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    Not sure if this is the question you wanted answered, but here is my go:
    jewels.p wrote: »
    Yeah but what about the hours? Are hours only involved if F.O are absorbed using hours but just units if they are absorbed using units produced?


    If the fixed overheads are absorbed on hourly basis, you use the hours as a basis.
    If the fixed overheads are absorbed on unit basis, you use the hours as the basis.

    It should be always clear if they are absorbed on unit or hourly base and you should use that as a basis.

    Does that help?

    Cheers,
    Rinske
  • jewels.p
    jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
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    Hi Rinske,

    Quote: Are hours only involved for the Volume Variance if F.O are absorbed using hours but just units if they are absorbed using units produced?

    This is for the Overhead Volume Variance. As on my notes it has the calculation as Budgeted Prod in S.H less Actual Prod in S.H x S.A.R.

    But in this example the hours arent used. It is only the units this is why I am confused?
  • Rinske
    Rinske Registered Posts: 2,453 Beyond epic contributor 🧙‍♂️
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    It sounds too complicated for a Thursday morning when I'm still stuck on the weekly bankrec, but I think that it depends on how you absorb the overheads.

    If the overheads are usually absorbed on hours, you would calculate the variances based on hours as well.

    But if overheads are calculated/ absorbed on units, you would calculate the variances on units as well.

    I think the reason is to keep it comparable. If you calculate the variance based on hours, while everything else is based on units, it would be a lot harder to explain to managers where the differences come from.

    I'm just not 100% sure that I am right on this, sorry.
  • jewels.p
    jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
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    Thanks Rinske x
  • Marga
    Marga Registered Posts: 981 Epic contributor 🐘
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    hello

    from Kaplan


    Fixed Overhead Volume Variance
    Absorption Rate x (Standard for Actual Output - Budgeted Output)

    The absorption rate is normally stated in the exams, it is important to look whether it's units based or hours based, and then the figures inside the brackets will be the same.

    hopefully that makes sense

    Absorption rate = 100K/500K = £0.2
    Standard for Actual output - budgeted output = 540k-500K = 40K

    Therefore variance = 8000

    We should have absorbed 108K (0.2*540K)
    We budgeted 100K therefore we have overabsorbed 8000 which is a favourable variance
  • jewels.p
    jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
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    So I should scrap my notes then. As they have both the units and the hours in the Volume Variance!

    Thanks Marga you really know your stuff!
  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    A-Vic wrote: »
    i get it now because its absorbed by unit production you just divide budget by the units then times it by the difference.

    e.g

    £100,000 / 500,000 units = 0.20p

    so difference = (500,000 buget - 540,000 actual) x 0.20 = 8000 fav because they managed to produced more units they absorbed more of the overhead cost

    Agreed same as i said
  • jewels.p
    jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
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    Yeah Vic well done to you too! Sorry I had gone off track from the MAC paper we woz on about. I was now querying the actual calculation for the Volume Variance. I am now rereading my book and it does say for the Volume Variance the output is measured in units if the absorption base is units but measured in hours if the absorption base is in hours.

    So goodness knows where I got my "notes" from that says (Budg Prod in SH less Act Prod in SH) x SAR

    The Volume Variance is always the one I get wrong in the Past Papers
  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    jewels.p wrote: »
    Yeah Vic well done to you too! Sorry I had gone off track from the MAC paper we woz on about. I was now querying the actual calculation for the Volume Variance. I am now rereading my book and it does say for the Volume Variance the output is measured in units if the absorption base is units but measured in hours if the absorption base is in hours.

    So goodness knows where I got my "notes" from that says (Budg Prod in SH less Act Prod in SH) x SAR

    The Volume Variance is always the one I get wrong in the Past Papers

    thanks to you too jewels made me think about it too and now think its gonna stick a bit better too :)
  • jewels.p
    jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
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    Are you fed up with your picture already thats twice in one day you've changed it! :lol:
  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    jewels.p wrote: »
    Are you fed up with your picture already thats twice in one day you've changed it! :lol:

    to match my mood
  • Marga
    Marga Registered Posts: 981 Epic contributor 🐘
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    A-Vic wrote: »
    to match my mood

    you are going off topic :p if you dont have a query about the wonderful world of MAC please KOOH!!!!! (keep out of here)








































    LOL just kidding
  • jewels.p
    jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
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    Brought this up again as I am trying to do this Past Paper again and still didnt get the Labour Budget right. I always struggle with them for some reason! :mad:
  • jewels.p
    jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
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    I also dont understand the Chief Assessors Report answer to Task 1.3. The surplus hrs from Month 1 could be used to reduce the deficit in Month 2. How could this happen?

    :confused:
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