under recovered

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
I thought the question meant underabsorbed fixed overheads is this not right?<BR>

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    under recovered

    That's exactly what I thought. When I got on the train i checked my notes and it was correct, so far all of you that are in doubt..........<BR><BR>Does anyone know what question 2.1 was???
  • System
    System Posts: 100,534 🤖 Admin 🤖
    pay back

    i got no payback period cos couldnt know how to work it out
  • System
    System Posts: 100,534 🤖 Admin 🤖
    pay back

    Yes I got 2.6 years when rounded off! Yipee!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    under recovered

    I feel the same as you, I can see me doing costing again next year
  • System
    System Posts: 100,534 🤖 Admin 🤖
    pay back

    What figure did you get for the payback? I got 2 years 6 months was this correct?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    under recovered

    It seems by all the postings that this exam is causing quite a concern. Lets hope the examiners are reading our postings so go more lenient on the marking.....
  • System
    System Posts: 100,534 🤖 Admin 🤖
    under recovered

    I did not know what they meant by this question, and rambled on about, if a machine breaks down you cannot make up your loss. what a load of rubbish!!!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    under recovered

    i dont even know what im talking about help
  • System
    System Posts: 100,534 🤖 Admin 🤖
    under recovered

    I thought the idea was for us to be able to show the examiner how much we know. I didn't think that I'd need to have a degree in "Deciphering Hieroglyphs" in order to understand the questions!<BR><BR>You're right though, it was a case of read and re-read the questions over and over again. I was amazed that the opening question was a stock card. I was convinced by my tutor that we wouldn't see one of those again because this new examiner thought they were too easy.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    under recovered

    someone tell me if this is right please<BR><BR>underrecovered iswhen budget over heads is higher than the actual overheads. this means a loss in profit so its credited to the profit and loss account.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    under recovered

    I found the wording of this exam quite hard to follow. I kept reading things over and over again. Why don't they write plain english..
  • System
    System Posts: 100,534 🤖 Admin 🤖
    under recovered

    I'm really annoyed about how they worded this. I left this question to the very end hoping for some inspiration and it turns out that it's just a simple under absorption matter, ie, debit P & L.<BR><BR>Why couldn't they just say under absorption instead of under recovered? My initial thought was that my tutor never mentioned this. I ended up waffling about contribution and that not enough sale of units would result in insufficient contribution towards fixed costs. You never know, I might get something for saying that, even though I've concentrated on Marginal instead of Absorption!!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    under recovered

    under recovered is when the actual overheads incurred exceeds the actual absorbed, so this would debit the profit and loss and credit fixed overheads, resulting in a reduction of profit
  • System
    System Posts: 100,534 🤖 Admin 🤖
    under recovered

    i treated this question as under absorbed.. i think it was re-worded to see if you had fallen asleep or not.... as if!!!<BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    under recovered

    I freaked out on this question... i was unsure what they meant by the term "Under-Recovered". It seems silly now but if they had said "Under-Absorbed" i would have been able to answer this question no probs.<BR><BR>Andy
  • System
    System Posts: 100,534 🤖 Admin 🤖
    under recovered

    i wrote under recovered is where you loss profit so credit the profit and loss account.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    under recovered

    I thought that it meant if your total contribution is less than the fixed overheads then you have under recovered. Then that two ways of doing this were by selling less than the break even number of units, or by selling below the absorption cost (as the absorbtion cost includes a share for fixed assets).<BR><BR>I take it that this is different from everyone else? I didn't include anything about OAR or budgeted figures.<BR><BR>Oh well I think I got most things right, just this and the marginal/absorbtion costing figures wrong. Can't fail because of one wrong question. :-)
  • System
    System Posts: 100,534 🤖 Admin 🤖
    under recovered

    I wrote about under-absorption too. commented on how if the budgeted labour/machine hours differed from the actual labour/machine hours it could cause under recovery and a loss in the profit and loss account.<BR><BR>Which question was 2.1 Melly?<BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    under recovered

    well i wrote that is is possible to under recover fixed overheads and that to prevent this you shouldnt set your selling price to low as that would give low contribution, when really you want your contribution to be as high as possible so that it goes towards the recovery of your fixed overheads.<BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    under recovered

    i thought the same and said that under meant debit on p&l and increase in costs
  • System
    System Posts: 100,534 🤖 Admin 🤖
    under recovered

    If you have made a loss this means youve incurrede another expense, do it would be a debit to pl.<BR><BR>Best to think back to when you do your trial balance in your profit and loss side sales are credits, so if youu increase sales and your credit are higher than your debits, you make a profit

Categories

Privacy Policy