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## Comments

814It's amazing how can you follow and reply to anyone the day just before the exams!

anyway it was a question in a MAC paper, dec 08, task 2.3:

Data: Actual production for the month was 23,000 bottles, calculate:(iv) fixed production overheads absorbed into production

and the answer was

(iv)Fixed production overheads absorbed into production 23,000 x £6 = £138,000!I would get the answer right if the question would say "

calculate standard fixed overhead for actual prodution"!158YOU HAVE YOUR ORIGINAL PRICE VARIANCE =(standard price - actual price) x actual quantity

The PRICE VARAINCE DUE TO EXCHANGE RATE MOVEMENTS=(standard price - currency adjusted standard price) x actual quanity

The PRICE VARAINCE DUE TO OTHER INFLUENCES(currency adjusted standard price - actual price) x actual quanity

Your right it asked this question in Dec 05 Question 1.2...Do you wnat to run through this question with me block15 so that we can clarify this togeher???

158The way it works it out is by getting the actual production of 23,000 and multiplying this by the £6 which is the Fixed production overheads found on the cost card for budgeted overheads.

So yes you were correct by saying i was asking for you to calculate the standard fixed overhead for actual prodution"!

Well done

Thanks for your commens

11On December 2008, how do you work out the raw materials stock turnover in days. Thanks

21I've looked at the answer so I've kinda cheated but I wanted to check my methods were ok :tongue_smilie:

I've got the £6500 favourable as the normal formula.

And then it looks like the examiner has converted the standard rate into $, which is 90 cents and then divided that by the new rate to get the adjusted rate in £ (i.e the value of the paper at standard rate but with the current exchange rate).

And the put it into the formula as you have said. It seems easy when he has done it (!!) but I just want to check that I have the right thinking as it is a little tricky.

And I agree ... lets hope it isn't in there!

158Okay Start with you stock figure of £60,000 divide by purchases of material glass £540,000 x 365 = 40.56 days ...

Let me know if you can work i out for product SP3000?

158Could do with some more practice though really could'nt we!!

It's a mind blower when you look at it but if you break it down step by step i becomes okayish

56Got another for ya. I thought that in performance indicators, age of debtors was was always debtors/costs of sales. I did the pev mock before and it's got debtors/turnover. Is that right?

158Credit payment period is creditors / cost of sales or purchases

2115873474158* THE LIMITS OF £1,500,000 AND £300,000 ARE SCALED DOWN BY DIVIDING THEM BY THE TOTAL OF ASSOCIATED COMPANIES - REMEMBER THE COMPANY ITSELF IS NOT AN ASSOCIATED COMPANY!!

E.G

AAT LIMITED HAVE 2 ASSOCIATED COMPANIES

ITS PCTCT FOR THE CAP FOR THE Y/E 31/3/09 IS £250,000. IT ALSO RECIEVED DIVIDENDS OF £45,000.

THE PROFITS WOULD BE £250,000 + £45,000 X100/90 = £300,000HERE WE HAVE 3 COMPANIES TO DEAL WITH!!

SO SCALE THE BAND LIMITS DOWN;

£150,000 / 3 = £500,000 AND

£300,000 / 3 = £100,000

AS A RESULT THE COMPANY AAT LTD PAYS CORPORATION TAX AT FULL RATE LESS MARGINAL RELIEF-BECAUSE THE PROFITS OF £300,000 ARE HIGHER THAN £100,000 BUT LESS THAN £500,000 SO FALL INTO THIS BAND!!!

PCTCT AT FULL RATE 250,000 X 28% = £70,000

LESS MARGINAL RELIEF:

7/400 X (500,000 - 300,000) X (250,000/300,000) = £2,917

CORPORATION TAX LIABILITY £67,083

HOPE THAT HELPS!!

TRICKY SUBJECT TO GRASP THIS ONE

158BENCHMARKINGis making comparisons in order to improve by setting standards and targets.This may include comparing performance indicators.

Benchmarks may be

set internally

set by external bodies

set either internally or externally with reference to similar organisations ...i.e. Tesco could benchmark with Aldi...

Hope that helps

15815815874Thank you

1581.The tax year in which the business starts

BASIS PERIOD -from the start date to the next 5th April2. the next (second) tax year

BASIS PERIODthe 12 monh period tha ends on the accounting date in the second tax year.or if that's impossible because the accounting period isn't long enough

the first 12 monhs of the business

3.the third tax year

BASIS PERIODnormal 'current year basis - the 12 month accouning period that ends in the third tax year.The only exception is when a business starts in one tax year and then produces a long set of accounts that end in the third tax year. Since there is no accounting end date in the second tax year the previous summary does not apply. Instead this is dealt as follows

* the basis period for the second tax year is 6th April to 5th April

* the basis period for the third tax year is the 12 months leading up to the accounting date in the third tax year

158i have btc on tuesday so tommorrow night i will be revising right through btc so i might be able to give you more detail and explain it better then.

7474158depend which variance your working out?

which one isit?

74158divide that by actual quantity = (store this answer)

Then you need to know the standard price so divided the standard total cost by the standard amount used = (store this answer)

ADD both answers together to get your answer

158take the variance that they give to you

divide it by

the budgeted cost of labour divided by the budgeted hours = (store this answer)

next step - take the budgeted hours divide by the budge units and x by the actual units = (store this answer)

If the variance that they give you is favourable take he 2nd answer and minus the first

If the variance that they give you is adverse add them both together!

1587467Thanks