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A2 Accounting

A2 Accounting. Unit 7 Lesson 6 Absorption Costing. The greatest unexplored territory in the world is the space between our ears Bill O’Brien. You are what you exercise because your brain runs on oxygen. You are what you think. Y. our attitude. affects your.

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A2 Accounting

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  1. A2 Accounting Unit 7 Lesson 6 Absorption Costing The greatest unexplored territory in the world is the space between our ears Bill O’Brien

  2. You are what you exercise because your brain runs on oxygen

  3. You are what you think Y our attitude affects your interconnections 700 NEUROTRANSMITTERS because of 70 neurotransmitters in your brain

  4. By the end of this lesson Have assessed your homework and You will Have started your next question on Absorption Costing Have consolidated your learning from the Shine/Whatton/Waller Questions

  5. Shine Ltd Factory Decide the fairest method of apportionment Apportion total cost to each department Find the TOTAL overhead cost for each dept

  6. Shine Ltd Factory Work out the direct labour hour rate for each dept

  7. Shine Ltd Factory Next, check next slide for Whatton Limited

  8. Whatton Ltd Factory

  9. Whatton Ltd Factory ..overhead abs rates

  10. Whatton Ltd Factory

  11. Recap new learning • Answer each of the following Q’s with the help of your partner • Pick out 2 learning points from Whatton Limited • Whatton Ltd’s mark up was 50%. How do you think this figure would have been determined? • What is absorption costing • What is meant by allocation and apportionment of overhead costs?

  12. Wagg Ltd Factory

  13. Wagg Ltd Factory ..overhead abs rates

  14. Wagg Ltd Factory ..working out the SP

  15. Recap • Answer each of the following Q’s with the help of your partner • Apportioning overheads to departments is not an exact science. What is the main principle involved? • Give 2 other names for absorption costing • How would you calculate a labour hour rate for the machining department in Mike Baldwin’s Factory • What does machine hour rate mean? And how would you make use of it?

  16. Homework Please do SmartStuff plc for next lesson Cut and paste the notes on Marginal Costing in your notebook Read through the notes, highlighting the main points

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