PCR

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Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PCR

    I dont quite understand what you mean there Stacey but, the question will tell you if there is a production fault or a materials fault..... you gross up the % given to give you a total Production or total Materials...

    The when you times the total figure by the faulty % you get back to your required production or materials to satisfy sales.

    Hope this kinda helps your question.

    Regards

    Dean
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PCR

    EvaG your more than welcome! Now lets just all get through it!!!! :D:D:D

    Regards

    Dean
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PCR

    Can someone explain why in that question where it asks you to charge the Overtine to overheads and then says that overheads are 150% of labour etc. Why do you not add on the overtime excess to the 150%? Someone has touched on this before but I think they only said they would not include the labour because the answer to that paper didn't. I'd really like to know why and I can't get my head around it.

    Also, do you think it is likely that responsibility accounting will come up and what do we need to know about it?

    Yours gratefully
    Bobby
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PCR

    Bobby read the whole thread :lol:

    Regards

    Dean
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PCR

    dean, I've read the whole thread adn I still don't get it. I see that sandy is trying to explain it in T accounts but I dont understand
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PCR
    I'm still not entirely sure, although I think what Sandy is saying above is that overtime premiums are charge to revenue overheads and not production overheads.

    So when producing the "Total Cost of Production" this is why the premium is always left out and when you think about it the notes do always say that they are charged to "OVERHEADS" not "PRODUCTION",

    Regards

    Dean

    Oh I see, sorry Bobby.

    Did you see my thread (above) is that any clearer for you?

    Regards

    Dean
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PCR

    Not really but I think i must have left my brain in hospital I've got a real block on it.

    So if they tell me that the prem of OT is charged to OH I take it off the cost of labour but then don't do anything else with it - it that right?

    if they don't say anything about the OT prem do I just leave it in the cost of labour bit?

    really appreciate your help
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PCR

    Can someone list the differences in absorption and marginal operating statements/flexed budgets in case it comes up as a memo question
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PCR

    The question will ask you to calculate the labour buget - X amount of hours.

    If this is not enough hours to satisfy your sales you will get X amount of overtime hours.

    You will be give a £? for normal labour hours and then a note about overtime hours.

    Take your normal hours x your given labour rate and this figure will be included in your total cost of production.

    Then take the overtime hours and x what ever your note says.

    Normal hours + overtime hours is your total labour buget.

    The overtime premium is left out because the notes say that its charged to overheads (revenue) not production.

    Regards

    Dean

    p.s if you're still not sure please say. :)
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PCR
    Stacey1 wrote:
    Can someone list the differences in absorption and marginal operating statements/flexed budgets in case it comes up as a memo question

    Absorption takes account of stocks i.e total production.

    Marginal is only concerned with variable and fixed costs used to achieve sales.

    Regards

    Dean

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