ACCN4 - Monday 18th June 2012

What would the question usually ask us when they would like us to Absorb the Direct Material .. Direct Labour and Fixed Costs?

What would the question usually ask us when they would like us to Absorb the Direct Material .. Direct Labour and Fixed Costs?

Not sure what you mean, but i will still try to answer, ask again if its not what you were looking for!

you cannot 'absorb' direct costs such as labour or materials as they are already associated with specific products, you can only absorb overheads (on a relevant 'basis'), becuase they arent direct so need to be 'absorbed' by units of output to reach a fairer costs and ensure full cost recovery.


ADDITIONAL INFO
remeber if the question asks you to absorb the ovrhead and then says calculate selling price, you must add the overhead absorption costs (remeber to multiply by necessay labour or machine hours to reach the costs so if OAR is 10/ labour hour and a products takes two labour hours then 10 X 2 = £20) to direct costs such materials and labour costs.
The reason why i pointed this out is because OAR questions often do this (i diid some past exam paper analysis of both old and new spec) and they often ask for OAR an dthen selling price hoping to catch you out because alot of people forget that the OAR is per hour and products often take longer than 1 hour to make and some even forget to add direct costs and base the selling price only on the overhead costs.

A question would not ask that and it seems like you havent learnt Absorption properly the reason for OAR is to charge overheads to a unit direct costs have already been charged to the unit as direct cost is something that can be identified with the cost unit.

e.g making a phone the materials will be the keys, the labour that goes into to it are all direct costs so its easy to charge it to the unit, whereas to find out how much electric went in to making it would be difficult thus the reason why we use OAR.

I Get it Thanks Both of you .. and yeh i havent learnt this bit properly .. if you dont mind me asking how did you guys do in Accn3?

So what has everyone predicted that will be on tomorrow?

hi guys, i'm finishing up my revision for tomorrows exam, it helps to go through the specification on the AQA website and just make sure you're ready for what ever they throw at you, one thing people need to remember is that there are a lot of marks for the written questions in this unit so make sure you are revising the written aspects such as:
- benefits of using transfer price in relation to factory profit
- adv's and disadv's of using budgets in general
- uses, adv's and disadv's of Standard, ABC, Marginal and Absorption costing - comes up a lot!
- adv's and disadv's of break even

also make sure you are reading the way they mark the written questions via past exam mark schemes, i'm not sure if this is a generic problem but because i study Business i often over complicate my answers and miss the basic marks, so make sure you have perfected your writing abilities

Finally make sure at the end of the paper you go through and check every calculation you have made, sounds simple i know but catching the wrong number in a calculator can cost a lot of marks especially in the questions that dont give OF marks, and remember you have 2 hours so pace yourselves and dont rush through the paper!

good luck

i have made a six page booklet and learnt all the written stuff off by heart lol

Does anyone know where I can get the January 2012 paper from?..it's not on the aqa website..

haha that was good thinking, i've just plastered my room in posters

Does anyone know where I can get the January 2012 paper from?..it's not on the aqa website..

the first thing im gonna do in the exam is look for all written questions and write down what i remeber (ill be waking up at 6 to revise what ive learnt off by heart lol)

very much doubt they would ask you to draw a break even graph so don't waste time practicing, they may ask you to interpret one but you just need to be able to think on your feet, as long as you can identify margin of safety etc. you will be fine

Also do not stress out! i keep saying this because i am trying not to myself haha, but in the ACCN3 exam i didn't understand the first question on realisation and i freaked and sat doing nothing for 25minutes just panicking and trying to remember how to breathe, keep calm and carry on, leave the harder questions to the end if necessary and write down all of your workings