AAT Advanced diploma synoptic - Practice paper 2 - Task 3 c) (i)

amycheese1993

Hello

Can anyone tell me how to work out the depreciation expense for the year?
The answer is £124000.

Many thanks

amycheese1993

Please see attached for the full question

amycheese1993

Please see attached for the full question

annefoth

Should there be an attachment?

Ssanta

(Non-current assets at cost) 920000 - (Non-current assets accumulated depreciation) 300000 = 620000 (carrying amount)
Depriciation expense for the year = 620000*20%=124000

Ssanta

PhilJRoo76

Thanks for the explanation for the answer. I've my exam this coming Thursday (11th) and all help in the forum very helpful.

PhilJRoo76

Actually, I have an extra question for task 3D, in assessment 2, right underneath the question you've highlighted above, the question relates to working out both the actual contribution for the period as £680,000 and the actual fixed costs of £412,000, can anyone show me the working out for those answers? You'll see the questions on assessment 2, section 1.3 D? Thanks in advance for any help.

Ssanta

For 3 (d)
(i) Actual Contribution for period is 680000

From the following extract of New Place trial balance at 31 December 20X7 You take Sales revenue value (3200000) and take away Direct materials (2340000) and Direct labour (180000)
3200000 - 2340000 - 180000 = 680000

Sales revenue - variable costs = contribution

(ii) Actual Fixed costs, adjusted, are 412000

From table you take Overhead value (288000) and add calculated in (c) (i) deprication expense (124000)
288000+124000=412000 (fixed costs)

the questions (iii) and (iv) are explained in ansvers provided by AAT:

(iii) Calculate the break-even volume based on the actual figures or 20X7. You must
show your workings. (2 marks)
The revised break-even volume, using the actual figures, is 12,118 units.
Workings:
Actual contribution per unit = £680,000/20,000 units = £34 per unit (1)
Actual break-even sales volume = Fixed costs/Contribution per unit: £412,000/£34 = 12,118 units (1)


(iv) Explain why the actual break-even point for 20X7 was different from the budgeted
break-even point. (2 marks)

Candidates are not expected to raise all the points above for the full marks, but their inclusion here
serves to indicate the depth of knowledge required for each item.
The actual break-even volume of 12,118 units is higher than budgeted at 12,000 units and has been
affected by the following changes compared to the budget:
(i) Decreased fixed costs, which have fallen from £600,000 to £412,000, this reduces the break-even
volume required. (1)
(ii) Much lower contribution per unit than budgeted, which increases the break-even volume required.
(1) Budgeted contribution per unit was £170 - £120 (or £600,000/12,000) or (£600,000 +
£400,000)/20,000) = £50 per unit, compared to actual contribution of only £34 per unit. (1)
The reduced contribution per unit compared to the budget has been caused by a reduced average
selling price per unit (budget £170, actual £3,200,000/20,000 = £160), (1) plus an increased unit cost
(budget £120, actual £2,520,000/20,000 = £126).

PhilJRoo76

It was just unfortunate that I was sitting my exam when your response came through on here. Ooh well, at least I know what to expect when I re sit. Thanks!

Ssanta

Sorry! I re-sat this exam 3 times already. I know it is not encouraging but it will be fine. Sat my exam on 9th and waiting for results now but unfortunately I think I failed as most of my question were definitely in klingon. Good luck. I hope you pass.

PhilJRoo76

Thanks. But, I'm not even going to bother checking my result when it comes out, it was that bad. Just waiting till payday and going to put in for it again. Ooh well.

jettimmax1

Hi

this is also something I am also struggling with

Can anybody help me with, What could be fixed cost different variations? Admin Costs, Overheads, Rent?

and what be variable? Material and Labour?

If we wanted to work out our profit for the year, take our sales revenue minus variable minus fixed cost?

Do we take into consideration at any point accumulated depreciation?