Hello, On Q21 I got it incorrect because I assumed the costs of supervisors was already included in the labour costs - to me that wasn't made clear in the question. This happens often when I am revising for my exam, what can I do? Thanks in advance.
Please read carefully, it says "In addition to the above costs, the management accountant estimates that for each increment of 50,000 units produced, one supervisor will need to be employed. A supervisor’s annual salary is $35,000."
When I did high-low method on Q22, I tested the VC against Year 2 and Year 3 data and ended up with a different fixed cost to 225,000.. is that correct?
Flexible budget: future--we know fixed and variable costs, can budget for any activity level. Flexed--Past. Set the flexible budget to the actual activity. "We flexed the budget to last months activity"
Hello,
On Q21 I got it incorrect because I assumed the costs of supervisors was already included in the labour costs - to me that wasn't made clear in the question. This happens often when I am revising for my exam, what can I do?
Thanks in advance.
Please read carefully, it says "In addition to the above costs, the management accountant estimates that for each increment of 50,000 units produced, one supervisor will need to be employed. A supervisor’s annual salary is $35,000."
Oh right 😅 thanks @@SteveWillisACCA
Where did you get the Fixed Cost from? 225,000?
Please check in the question again--they give you the fixed costs in the original budget.
@@SteveWillisACCA Thanks missed that!, one more question how did you get the 210,000 units?
@@yazmincashmore9232 80% of capacity
@@MaxX-ou2fw thanks
When I did high-low method on Q22, I tested the VC against Year 2 and Year 3 data and ended up with a different fixed cost to 225,000.. is that correct?
Yes, high-low is just an approximation and ignores all the data except the high and the low one.
whats difference between flexed and flexible budget
Flexible budget: future--we know fixed and variable costs, can budget for any activity level. Flexed--Past. Set the flexible budget to the actual activity. "We flexed the budget to last months activity"
Pleased how did you get 210000