Did anybody get the variace between the 2 statements of £28,000???

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Did anybody get this due to over absorption??

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Did anybody get the variace between the 2 statements of £28,000???

    actually, Ash....... I know i did something wrong here so yes, i stuck it in over absorption. i dont know quite how i did it, because the marginal rec balanced, so to make my numbers add up thats where i stuck it. I needed it to balance so I could talk about it in the further question.

    if it was in DFS i would have stuck it in suspense and apparently you get a mark for showing "wit..."
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Did anybody get the variace between the 2 statements of £28,000???

    oh, and sorry, the figure wasnt £28,000, that was something else..... cant remember what but didnt it have something to do with fixed overheads? if it did, you should have included it AFTER cost of sales and then your rec would have balanced rather nicely

    my other post was about absorption because obviously i couldnt add up in the exam....! :roll:
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Did anybody get the variace between the 2 statements of £28,000???

    Both of my recs balanced but there was a variance between the 2...which I got at £28,000 as marginal costing has the cost of £260,000 whereas absorption uses the predetermined rate of £48 - £48x6000hrs = £288,000. But some people have mentioned about contribution but we didnt have the sales figures to include that did we??
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Did anybody get the variace between the 2 statements of £28,000???

    £48 x 6000 hours? wasnt it £48 x 0.5 hours which is £24?

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Did anybody get the variace between the 2 statements of £28,000???

    The 0.5 hours was per item, therefore standard hours was 11,500 units x 0.5 = 5750, but it said there were 6000 hours worked (inefficiency of 250) so 6000hrs is obviously 12000x0.5 - 12000x£24 = 288000, as does 6000 x 48?? I thin anyway
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Did anybody get the variace between the 2 statements of £28,000???

    i read it to be that the standard absorption per unit was 0.5 as it gave you £24 per unit. It gave you the actual hours, and we worked out the standard, but the OAR was per standard hours per unit which was 0.5? or maybe thats where i went wrong then....
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Did anybody get the variace between the 2 statements of £28,000???

    Erm, Now Im confused, im just doubting myself now, I hought it was absorbed by direct labour hours and not by the actual production, and as te hours were 6000 then this was actual absorption but the standard absorption was as you said 0.5 x 11500 (quantity) = 5750 at 48 per hour = 276000
    or 24 x 11500 = 276000 but the ineficiency of 250 hours at £48 per hour = 12000 giving a total absorption of 288,000...I did it on the hours as it said fixed overheads were absorbed per hours not units, but all I have done now is confuse myself ha! Good luck, I think I need it now
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Did anybody get the variace between the 2 statements of £28,000???

    ash i think you may be right because my first rec didnt balance but my second one did. the only difference i had was the fixed overheads.. but actually saying that the fixed overheads were still included in the marginal rec (the one i got to balance) so.. erm... dunno...
    i give up... drinking wine yum yum i dont care <fingers in ears>..... im sure we will both be fine dont worry about it

    ive got PCR on Thursday so I need to save some "panic" energy lol :P

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