Assessment 2 task 3B
paige08x
Registered Posts: 7
Hi, I am struggling to work out the total fixed overhead variance on 3B.
How do I do this?
How do I do this?
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Comments

Hey.
These questions are working backwards, the formula for Expenditure variance is:
Total standard fixed costtotal actul fixed cost=expenditure variance
You have worked out the the standard/budgeted fixed cost in part a as 16,000 already.
16,000?=2,200 (this figure is given in the question already.
If you want to know the actual fixed overhead cost you rearrange the formula to:
16,000+2,200=18,200 Sorry cant put a pound sign as my keyboard isnt working.
The total fixed overhead variance is not too difficult as well but I just canot remember right now (trying to prepare for my synoptic assessment) how to work it out. I will try to go through my notes and write back to you tomorrow if its not too late.
Many thanks.
1 
Total fixed overhead variance is split into expenditure & volume.
Expenditure you know is £18,200 which against a budgeted £16,000 is £2,200A.
Volume is budgeted units vs actual units  budgeted 12,800 actual 14,000 meaning you produced 1,200 more than budgeted which is favourable.
Your overhead absorption is £16,000 / 12,800 units = £1.25/unit.
1,200F units x £1.25 = £1,500F.
£1,500F  £2,200A = £700A.
Hope this helps.
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Hi, I am struggling to work out the total fixed overhead capacity on 3B (c)
How do I do this?0 
Fixed overhead capacity is worked out by comparing the difference between actual hours worked vs budgeted hours worked.
2.5hrs/unit std, 12,800 units is 32,000 hrs budget.
Actual hours: 33600
Budget hours: 32000
1,600 hours favourable
xOAR/hr £0.50
£800F
The fixed overhead capacity variance focuses on how many hours were worked compared to budget, as hours worked was more than budget it is a favourable variance.1 
Thanks Irrorate. Whats about overhead efficiency ? 3B (C)
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Overhead efficiency takes the standard (flexed) hours and compares them to actual.
Flexed hrs: 14,000 x 2.5hr = 35,000hrs.
Actual hrs: 33,600 hrs
Difference: 1,400F
x OAR/hr: £700F.
To remember fixed overhead effic/capac remember this:
Standard (aka flexed)
Actual
Actual
Budget (compare to the original budget, not flexed budget!)
SA = efficiency, AB = capacity
Fixed overhead expenditure is always £, fixed overhead volume is always units & fixed overhead efficiency/capacity is always in hours.1 
Thanks. Can you help me with ques 4 Direct labour efficiency please?
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Unless I'm mistaken q4 is the marginal costing operating statement  are we still on sample 2? What are you struggling with?0

assessment 2 task 4 .
direct labour efficiency
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Thanks a lot. I am really struggling. My exam is on 13th may. Thanks for your help.0


Thanks for your help! Just sat my D&C exam! Wow! Not enough time!0

Hope it went well!0

Hi Irrorate, Do you have any working paper which shows all the calculation for Assessment 1? Can you please email it to me?0


Sorry to bother you Irrorate, Can you please help me with 9A,5A,3A and 1B from assessment 1.Thanks0

1B
Do a highlow between the given units to retrieve the variable cost. Plug that back in to get the fixed costs.
Then you need to heed the notice of fixed overheads increase £12,000 if units are greater than 30,000 and the variable costs reduce by £1.00 for units in excess of 25,000.
3A
"standard" means flexed. Flexed litres of fuel for 5,000 journeys. Work out budgeted (12,460L / 7,000J) £1.78L/journey x 5,000 so 8,900L for 5,000 journeys. You can work out hours by substituting litres for hours.
Fixed overhead volume variance we covered in post 3 in this thread. Budgeted 7,000 actual 5,000 variance 2,000A journeys OAR = (£140,000 / 7,000) = £20/journey
5A
3month averages you need to do some revision on time series and seasonal variations. Basically you take 3 months, add them together and divide by 3 so (5,760 + 5,820 + 5,760) / 3 = 5,780. Do this moving down so (5,760 + 6,600 + 6,120) / 3 = 6,160.
9A
Q9 has been answered by both myself and @N4T here: https://forums.aat.org.uk/discussion/comment/450902#Comment_450902
https://forums.aat.org.uk/discussion/comment/453841/#Comment_453841
I'm conscious of just feeding the answers as you will need to run through the processes. Hopefully I've provided starting points for all questions.
Let me know if I can help any more.
1 
I have read bpp books but when I am looking at question, I know the calculation. But I am really getting mixed up with all formulas.0

Hi Irrorate, Assessment 2 task 4
opening inventory month 3
(100009000) * 95 =
Is it right ?
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Can you please help me with task 4 production cost Month 3 Marginal costing ?
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