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August 2018

Uses and Limitations of Absorption Costing

By |2018-08-16T10:29:51+00:00August 16th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Absorption Costing: Uses and Limitations of Absorption Costing

  • According to research by CIMA the leading Management Institute
  • Traditional costing methods such as Absorption costing are still in widely used by manufacturing businesses throughout the world
  • There is are reasons for this

Uses/Advantages of Absorption costing

  • Often […]
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Absorption Costing: Statement of Profit Worked Example

By |2018-08-16T08:52:26+00:00August 16th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Absorption Costing: Statement of Profit Worked Example

The Question

Zambe Ltd produces […]

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Introducing Online Lessons via WhatsApp

By |2018-08-15T09:24:49+00:00August 15th, 2018|General|

We have heard your calls and are now introducing WhatsApp revision sessions. Below are some details about the service

How much will it cost?

  • The service will start at $10 this will entitle you to up to two subjects with each additional subject costing you $5 for example 3 subjects will cost you $15, 4 subjects $20
  • Payment is via Ecocash/PayPal/Visa […]
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Absorption Costing: Statement of Profit or Loss Example

By |2018-08-11T09:14:41+00:00August 11th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Absorption Costing: Statement of Profit or Loss Example

  • We have already looked at the format of a Statement of Profit or Loss under Absorption Costing here
  • It is now time to look at an example

Example Question

Oakwood Manufacturing Ltd started in business on 1 January 20×8 […]

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Absorption costing:Statement of Profit or Loss

By |2018-08-11T09:14:49+00:00August 11th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Absorption costing:Statement of Profit or Loss

  • Profit is the overriding aim of most businesses and for this reason management accountants do also prepare income statements (also known as statement of profit or loss)
  • Although similar in spirit to the Income Statement prepared by Financial Accountants it […]
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Absorption Costing: Over and Under-absorption

By |2018-08-10T11:35:49+00:00August 10th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Over and Under-absorption

  • As has been said before overhead absorption rates are calculated in advance
  • The formula for getting an overhead absorption rate is:
  • \text{OAR=}\dfrac{\text{Budgeted Production Overhead}}{\text{Budgeted Level of Activity}}
  • The budgeted level of activity can be units,labour hours, machine hours etc
  • It is […]
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Absorption of Overheads: Solution to Reapportionment of service costs question

By |2018-08-10T09:30:50+00:00August 10th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Reapportionment of service costs where there is interwork

  • This is a solution to the question found here
  • First we will use the repeated distribution method to redistribute service costs
  • Lastly we will use the algebraic method to reapportion costs
  • We have already looked at why […]
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Absorption of Overheads: Reapportionment of service costs where there is interwork

By |2018-08-10T09:30:41+00:00August 10th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Reapportionment of service costs where there is interwork

  • We have already looked at the need for reapportioning the portion of overheads that would have been allocated and apportioned to service cost centres
  • We also looked a simple example where there was no inter work among departments […]
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Absorption of Overheads: Reapportionment of service costs with no interwork

By |2018-08-08T12:10:46+00:00August 8th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Reapportionment of service costs no interwork

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Absorption of Overheads: Overhead Analysis Sheet Example

By |2018-08-08T11:03:50+00:00August 8th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Absorption of Overheads: Overhead Analysis Sheet Example

  • In this example we will look at how you can use an overhead analysis sheet to allocate and apportion overhead costs
  • It is important to note that while the format shown below is the most popular
  • It is entirely […]
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