ACCA – Management Accounting MA

Updates for the material for 2020–21 sittings

Amendments required to Study Text (ISBN 978-1-78740-587-5)

Study Amendment
Text
Page
224 Chapter 8 Missing text from Illustration 2
Please see Appendix 1 below.
443 Chapter 15 Actual quantity used × standard price should equal $6,600
Illustration 4

Amendments required to Exam Kit (ISBN 978-1-78740-612-4)

Exam Amendment
Kit
Page
96 Question 326 Please remove 'effective' from the question stem
213 Answer 325 Answers to Q325

235 Answer 456 Correct answer should be:

$186,000/3.433 = $54,180

Amendments required to Pocket Notes (ISBN 978-1-78740-639-1)

None reported

Integrated Workbook
IW Amendment
Page

Updated: 16 June 2020

 ACCA – Management Accounting MA

Updates for the material for 2020–21 sittings

Appendix 1

The fixed production overhead figure has been calculated on the basis
of a budgeted normal output of 36,000 units per annum. The fixed
production overhead actually incurred in March was $15,000.
Selling, distribution and administration expenses are:
Fixed $10,000 per month
Variable 15% of the sales value
The selling price per unit is $50 and the number of units produced and
sold were:
Production 2,000
Sales 1,500
Prepare the absorption costing and marginal costing statements of
profit or loss for March.
Absorption costing statement of profit or loss – March
$ $
Sales 75,000
Less Cost of sales: (full production cost)
Opening inventory –
Variable cost of production (2,000 × $15) 30,000
Fixed production overhead absorbed (2,000 × $5) 10,000
Less Closing inventory (W1) (500 × $20) (10,000)

(30,000)
(Under)/over-absorption (W2) (5,000)
–––––
Gross profit 40,000
Less Non-production costs (W3) (21,250)
–––––
Profit/loss 18,750
–––––

Workings
(W1) Closing inventory = opening inventory + production – sales units
= 0 + 2,000 – 1,500 = 500 units
(W2)
$
Overheads absorbed (2,000 × $5) 10,000
Overheads incurred 15,000
Under-absorption on overheads 5,000

Updated: 16 June 2020

 ACCA – Management Accounting MA

Updates for the material for 2020–21 sittings

(W3)
Fixed = 10,000
Variable = 15% × $75,000 = $11,250
Total = $(10,000 + 11,250) = $21,250
Marginal costing statement of profit or loss – March
$ $
Sales 75,000
Less Cost of sales: (marginal production costs)
Opening inventory –
Variable cost of production (2,000 × $15) 30,000
Less Closing inventory (500 × $15) (7,500)
––––– (22,500)
–––––
52,500
Less Other variable costs (15% × $75,000) (11,250)
–––––
Contribution 41,250
Less Total fixed costs (actually incurred) (25,000)
$(15,000 + 10,000)
–––––
Profit/loss 16,250
–––––

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Updated: 16 June 2020