[AverageAndy]

Yes sir shouldn’t the cost gap increase and target price remain the same?

[AverageAndy]

Hello there,

I will be taking my F5 exam under remote exam conditions on the 16th and am really intimidated after reading all of your reviews of the paper. Would anybody mind giving suggestions as to how exactly I should design my next 6days to be able to pass this exam fairly well, based on what you guys felt and experienced after taking your exam today?

Any help would be much appreciated!

[AverageAndy]

i plugged in ‘a’ as 8 and then subsequently followed the right procedure using units everywhere instead of batches, but apparently am getting a wrong answer. why??

[AverageAndy]

I think 22000 should be fully taxable. Any amount over 8000pounds is fully taxable otherwise exempt, if below then fully exempt.

Sir if am mistaken please correct me.

[AverageAndy]

Exactly was my point too sir! but apparently it seems its false. It acts as disincentive as companies tend to have narrow margins in external market, so selling division covering barely its costs would loathe to have external price as transfer price. Atleast thats what the BPP study text says…

[AverageAndy]

is that the case or am still wrong somewhere?

[AverageAndy]

i mean TPAR will increase* am sorry

[AverageAndy]

TPAR will decrease*

[AverageAndy]

Oh so throoughput per hr would remain the same as return is divided by bottleneck hrs and cost per hr is divided by factory hours, and becuase it is the latter which is getting increased TPAR will increa?

[AverageAndy]

Will fall

[AverageAndy]

Sir but even if they produce more throughout per unit should remain constant. And if factory hrs are increased then throughout per factory hr and consequently the TPAR ratio

[AverageAndy]

Or perhaps entertaining expenses are disallowed in case of CT but allowed for self-employed individuals calculating tax adjusted trading profits?

[AverageAndy]

Sir please correct me if am wrong.

[AverageAndy]

@Noah098 i think you are mistaken. As far as control and management is concerned, the domicile of the directors is irrelevant. Control and management basically refers to where the directors meet and make decisions, in other words where the AGM is held. So in case of your question, the company is non-resident in UK as it is one, not incorporated in UK, two, it is centrally managed and controlled(monthly & interim meetings ) overseas. These factors together make the company non-resident in UK.

[AverageAndy]

or perhaps it is like both have to pay CT, regardless of whether they are listed or not, just that in case of private firms CYB rule will be followed and in case of listed companies AP rule will be followed

[AverageAndy]

I am confused because a line in BPP suggests that even unincorporated firms need to pay CT. here’s the line:

“A company is any corporate body (limited or unlimited) or unincorporated association, eg sports club. And Companies must pay corporation tax on their taxable total profits for each accounting period. ”

How is this possible pvt. company would mean self-employed business and there are different rules for that as far as my understanding is concerned.

Am i going awry somewhere, sir? if yes can you help me out

[AverageAndy]

i understood my mistake sir. just finished watching all your lectures.

[AverageAndy]

@AverageAndy said:
Sir if an employee gets multiple cars and drivers too with a choice to use them even to conduct household chores then do those costs borne by the company, act as taxable benefits? or are exempt?

[AverageAndy]

Or is it that as long as the expenses are below the prescribed amounts no supporting evidence is necessary but the moment the expenses rise above the 5 pounds and 10 pounds amount fixed the bill is required, and then will be reimbursed by employer, without the employee actually having to pay any taxes over the additional amount?

[AverageAndy]

am sorry sir titled it incorrectly.

[AverageAndy]

But sir what you are saying doesn’t that apply to plant and machinery(or any asset in general) and equipment acquired to maintain the property, only?

[AverageAndy]

Sir why are $75 of monthly hire charges not considered relevant?

[AverageAndy]

May be i was not able to explain my point well to you sir. Actually my point is if the apportioned costs get divided among ‘n+1′(products we are currently making+1 additional product planning to introduce) instead of usual ‘n’ products then those ‘n’ products get cheaper by some amount as a consequence of which their prices also fall(given the company has a fixed margin or mark-up percentage per unit). this has potential to increase the sales of ‘n’ products and hence profits from them soar. And this is the theory because of which I feel apportioned costs should be relevant.

and even in the short run(or because of the contract being one-off) if the company cannot reduce its selling price(apportioned costs reduce as the new product shares the burden) the fact remains that their per unit profits increase, and given constant sales of units, profits rise(incremental cash flow).

this clearly makes apportioned costs relevant costing decision.

[AverageAndy]

I acknowledge the fact that it is not entirely related to our syllabus, but sir you have a knack for going deep and beyond, as far as your lectures are concerned. So I am a little curious to understand this from you. Would much appreciate your reply.

Thanks in advance.

[AverageAndy]

Preferably by giving an example.

Thanks and much appreciate sir.

[Author]

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