# Help Please - Level 4 - Decision and Control Practice Paper 1 - Task 2C

Nataliedory
AAT Student Posts:

**26**
Hi

Please can someone let me know how they work out the answer for 2C. Calculate the actual price per kg of material?

Please can someone let me know how they work out the answer for 2C. Calculate the actual price per kg of material?

## Comments

213AAT Level 3. 2018

AAT Level 4.

Xero Certified Advisor

262138892 - ? = -912

?=8892+912

?=9804/1140 actual quantity used= 8.60

AAT Level 3. 2018

AAT Level 4.

Xero Certified Advisor

213I am sitting the exam at the end of this month so revising as mad, moving house as well!

When will you have your exam?

AAT Level 3. 2018

AAT Level 4.

Xero Certified Advisor

26Thanks for your help

2626213TR days = TR/Sales x365, substitute

30 days =120000/sales x 365

Sales =120000x365/30

Sales=1460000, check if correct by inserting in formula

Gross profit % is 25%, and this is simply 25% of your sales, therefore

1460000 x25%=365000 is Gross profit

Same method is applied to your operating/net profit

Cost of sales is the difference between sales and gross profit, therefore

1460000 - 365000=1095000

Fixed production costs are 40% of COS, so

1095000x40%=438000

The rest from COS is your variable production cost

Non production cost is simply Gross profit - Operating profit, so 365000-219000=146000

AAT Level 3. 2018

AAT Level 4.

Xero Certified Advisor

262131095000-438000fixed cost=657000 variable cost

E) Trade payables days

TP days=TP/COSx365

117000/1095000x365=39 days

AAT Level 3. 2018

AAT Level 4.

Xero Certified Advisor

26213When tackling these questions the first thing I do is to calculate cost card for the materials and labour

Taking the budgeted information for the materials £21000/6000kg=£3.5 per kg of material

6000kg/3000 units=2kg per unit

Using those figures it is very easy to simply substitute in the formula and calculate the price and usage variance

Same can be done for labour

For the variable overheads remember that they are calculated exactly the same as the labour rate and efficiency variance

AAT Level 3. 2018

AAT Level 4.

Xero Certified Advisor

26Please can you explain how i get the Standard marginal Cost of actual production?

I have a few other things i am stuck on too from paper 2.

Task 7 A) Optimal Production units?

Task 7 B ) MAXIMUM PROFIT FROM THE OPTIMAL production?

Task 8 B II) THE REQUIRED SALES VOLUME?

If you have chance please could you help me? No worries if not as i understand you must be very busy.

Thanks for all your help!

213Material required per unit is (product X)

800kg/400 units=2kg

Do the same for y and z

Contribution per unit is obviously 4-1.5 =2.50, same is repeated for the other 2

Contribution per limited factor is the contribution devided by the limited factor we use per unit, therefore

2.5/2=1.25

Tge 3 products are ranked like this:

Y 600unitsx 0.8kg=480kg

Z 400x1.80=720kg

This leave us with 1600kg-1200kg=400kg material for X. We are using 2kg per unit, therefore 400/2=200 units can be made

AAT Level 3. 2018

AAT Level 4.

Xero Certified Advisor

213X 200 units x £2.50 contribution per unit=£500

Y 600x1.60=960

Z 400x2.70=1080

That is total contribution of £2540 less fixed costs, gives max profit of £1785

AAT Level 3. 2018

AAT Level 4.

Xero Certified Advisor

213Required sales volume will simply be your toatal fixed cost divided by the target fixed cost per unit

65000+45000+35000/5.75=25,217 units rounded

AAT Level 3. 2018

AAT Level 4.

Xero Certified Advisor

26Also Can you let me know how you get the answer for Standard marginal Cost of actual production on task 1.3?

You're going to smash this Exam!!!

213AAT Level 3. 2018

AAT Level 4.

Xero Certified Advisor

26213AAT Level 3. 2018

AAT Level 4.

Xero Certified Advisor

21339000/3000 units=£13 is your standard marginal cost

So 13x3200=41600 is your standard marginal cost for actual production level

AAT Level 3. 2018

AAT Level 4.

Xero Certified Advisor