Barry de Graff chat here Q & A Session now in progress. Please ask away
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2Paula Rutter and Mei Phillips
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Barry de Graff Here.
Jane Hasler Everyone, come and ask away here 🏻
Claire Oxley Here
Natasha Everard Sorry about that….events doesn’t want to play frown emoticon
Claire Oxley How can spot the difference between variance and fixed
Barry de Graff Good question Claire. OK here we go:
Fixed: the TOTAL cost remains the same at different levels of output
Variable: the UNIT cost remain the same remains the same at different levels of output
Semi-Variable: neither unit nor total cost remains remains the same at different levels of output
Claire Oxley thank you barry helpful
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Paula Rutter ok let’s get going don’t be shy
Paula Rutter I’ve heard there’s like loads of formulas to remember in cost and revenues. is there a way to remember these
Barry de Graff It’s actually not quite so bad at Level 3, Level 4 can be more challenging! Sadly, there’s no other easy way than practice practice practice with many tasks. Some students develop their own mnemonics like PEARLS at Level 2 but I’ve not found any common ones so far…
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Paula Rutter can u explain Fifo lifo and avco
for basic costings
Barry de Graff FIFO: the oldest stock is used first so inventory is valued at the latest prices
FIFO: the latest stock is used first so inventory is valued at the oldest prices
AVCO: stock is revalued to the average price per unit every time there is receipt
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Natasha Everard From other chat
Claire Oxley AVCO i have the problem with
Natasha Everard Barry de Graff questions for you
Paula Rutter avco I got stuck in the exam with that one
Barry de Graff Just divide total cost by quantity every time there is a receipt into stock to calculate the price
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Natasha Everard Is it necessary to have a calculator with a square root function on it for the cost and revenues assessment?
Barry de Graff Definitely for the economic reorder quantity but that counts as a basic function
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Paula Rutter I was told we need a scientific calculator for cost and revenues?
Barry de Graff So far as I am aware scientific calculators are not allowed in the assessment. Natasha?
Claire Oxley oh right.
Natasha Everard They can as long as they can not be programmed…
Claire Oxley please suggest a good one. as i like to see my calculators formula before =
Paula Rutter so just a basic with square root is enough ?
Natasha Everard Yes for level 3 and 4
Barry de Graff I think that’s all you need!
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Natasha Everard Question for Accounting students….what do find most hard to understand with costing?
Claire Oxley The wording of the text can be misleading. Hence always fall into the trap of failure on first attempt. I never give up
Natasha Everard Flexing the budget always got me….is there an easier way of remembering this?
Barry de Graff Not really other than remembering you need to compare like with like. For example, if you originally planned to build 100 houses but end up only building 50 then you’ll only need half the bricks you planned. It’s as “simple” as that….
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Natasha Everard What is everyone’s problems with Costing?
Natasha Everard And variances? oh how i love variances……
Barry de Graff Most people find the materials & labour variances fairly straightforward. Overheads however….
Again, no easy answer than to learn the formulae & practice, practice, etc….
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Natasha Everard Manufacturing accounts and accounting for waste always seems to be tricky….how can this be remebered easier?
Barry de Graff Process accounting? Normal waste is taken at whoever the scrap value might be. “Abnormal” waste is exceptional so we need to look at cost of production. Again,no easy answer other than learning the routine I’m afraid. gasp emoticon
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Natasha Everard Anyone else have any questions concerning costing?
Natasha Everard or even budgeting/financial performance?
Barry de Graff Costing can be one of “illogical” subjects like tax – there are rules to be learned which don’t necessarily come as easy as debits & credits I’m afraid. The key is lots of practice until you become comfortable with it.
If that’s the right word…
Claire Oxley Yes so in essence, the more practice the better you get
Barry de Graff Exactly!
Paula Rutter so should we leave c&r as last level 3
does it lead into budgeting ?
Barry de Graff There’s definitely a logic to that although lots of people prefer to leave PETH until last because of the words…. wink emoticon
Paula Rutter loved peth
Barry de Graff I think you may be exception….
But Neil Arnott will disagree. smile emoticon
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Barry de Graff And at L4 Budgeting does lead into Financial Performance.
Paula Rutter so those of us not started c&r yet
anything we need to look out for ?
is the exam similar to mocks ?
Natasha Everard There are a lots of the formulas that you have to learn in cost and revenues that appear in Financial performance.
Barry de Graff Yes AAT practice assessments are very similar. Most people seem to ind the most challenging area is AVCO….
Personally I think it’s the most straightforward but I would say that…
Paula Rutter can we pick your brains on markup and margin ?
should be simple but I keep getting brain block
Barry de Graff Of course, Mark UP from cost, MARGIN on sales.
Paula Rutter is one divide and the other multiply ?
Barry de Graff That’s a good way of putting it. Mark up we multiply by the mark up & add it. Margin we find the profit by division. Good one Paula!
Paula Rutter thanks
Paula Rutter Mark up
put the cost up
margIN
sales already came in
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Paula Rutter avco should be simple as it the average but it tripped me up on level 2
Claire Oxley it is, what i gather from is:- cost divided by unit (total)
Barry de Graff Correct!
Claire Oxley Maybe i understand more i think, however i’m surprised after the day i have had. Need to pick your brain regarding Pre payments on sage (another day)
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Claire Oxley = per unit
Paula Rutter Claire Oxley have u done costings exam yet ?
Claire Oxley nope, not onto mocks yet
Claire Oxley my final unit
Paula Rutter awww don’t forget you can’t exceed in all areas
there’s not much over 10 marks
you come out feeling deflated but it’s not many marks on each question so highest is a met
correct Natasha Everard ?
Claire Oxley I don’t mind, a pass is a pass
Paula Rutter just helping
Claire Oxley you a sweetie, thanks x
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Marie Evans What is AVCO?
Natasha Everard yes as with some AAT exams…they highest that you can sometimes get is met….ITAx is a perfect example of that
Like · Reply · 1 · 13 hrs · Edited
Claire Oxley AVCO – is average cost
Marie Evans Thanks xx
Natasha Everard Barry de Graff can you briefly explain AVCO for Marie Evans?
Paula Rutter Marie Evans avco is average cost
in basic costings you have 3 things to learn
lifo last in first out
Fifo first in first out
avco average cost
it’s about stock rotation and cost of stock
Marie Evans Thank you – still working on credit and debit, if struggling on that best get as many notes in now when I get the chance on all the other parts
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Natasha Everard Can you explain what actually the EOQ actually means?
Barry de Graff AVCO is most commonly used when we have liquid stock, e.g. fuel oil. Everything goes into the same tank & we cannot identify what was delivered first. So, we work out an average cost per unit (perhaps per litre) based on total cost divided by the total quantity held. Then when we issue stock, it is done at the average cost per unit.
Rachel Johnson I get lifo but forget when i get to present net value.
Like · Reply · 13 hrs · Edited
Rachel Johnson Don’t recognise EOQ.
Barry de Graff EOQ is a way of working out the best time to reorder stock based on things like the cost of holding stock (warehousing etc) how long it takes for stock to be delivered from the time we order etc. So, when stock levels reach a certain level, then is the time to order some more!
Like · Reply · 13 hrs · Edited
Claire Oxley What does the abbreviation mean?
Natasha Everard Economic Order Quantity
Paula Rutter is that level 3 ?
Natasha Everard Cost and Revenues
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Barry de Graff Economic (re)order quantity
Paula Rutter can u explain payback
cost and revenues
Paula Rutter I found the e learning on AAT helped with Fifo lifo
Barry de Graff Payback is how long it takes for a capital project to repay the expenditure, So say a new machine costs £10000. If that new machine generates additional turnover of £5000 a year then the payback period is 2 years – that’s when we get our money back.
Rachel Johnson No, i dont know payback cost & rev’s.
Rachel Johnson Trying to look it up now. Is it know as anything else?
Like · Reply · 12 hrs · Edited
Paula Rutter it’s ok don’t worry xx
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Sylvia Watson Solar panels good example
Cost is x thousand. Revenue fron generation and buyback tarriff. Payback about 10 years
Natasha Everard Right….I would like to say a big thank you to Barry de Graff this evening for taking the time out to answer the questions. Although he chat is about to end, if you would like to leave any questions here, we will answer them as soon as we can thank you all for your support
Barry de Graff Great example Sylvia – thank you!
Rachel Johnson Ok, yh. Thanks Barry!
Paula Rutter thank you Barry de Graff Natasha Everard
naughty Facebook for bad signal again tonight
Claire Oxley Thank you Barry de Graff
Rachel Johnson Ok, i follow Sylvia.
Terminology does throw me sometimes.
Jane Hasler Typical of Facebook! Hope others could still read everything and make notes! Thanks Barry and Natasha 🏻🏻🏻🏻🏻🏻
Marie Evans thank you all. Really enjoyed this session can’t wait for the next one
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