Reciprocal Method for Allocating Support Costs (SHORTCUT USING LINEAR EQUATIONS)

Поделиться
HTML-код
  • Опубликовано: 16 дек 2024

Комментарии • 78

  • @sinny721
    @sinny721 5 месяцев назад +7

    You are seriously my hero. Paying thousands for classes and textbooks and this is still the best resource I have over and over again.

  • @lauraramos5452
    @lauraramos5452 6 лет назад +19

    thank you. You are great at explaining, unlike soooo many instructors... you saved my midterm

  • @saltyscholarmain5163
    @saltyscholarmain5163 Месяц назад

    After roughly four hours of the book, professor's lecture recording and notes, mcgraw hill's explanation, and crying not helping me understand this I finally get it. Thank you so much.

  • @ohmygoshez
    @ohmygoshez 3 года назад +6

    THIS IS EXACTLY WHAT I NEEDED. Thank you for this and the previous video!! I can't tell you what a relief it was to finally understand this.

    • @Edspira
      @Edspira  3 года назад +1

      Glad it helped!

  • @aliaraduan9191
    @aliaraduan9191 6 лет назад +10

    Thank You! I was struggling with my homework and this explanation made it so easy ....

    • @Edspira
      @Edspira  6 лет назад

      Great! I'm happy to have helped.

  • @annamao1184
    @annamao1184 2 года назад +3

    2 days before my exam HAHA, finally understand!! Thanks A LOT

    • @Edspira
      @Edspira  2 года назад

      Glad it helped!

  • @jasondeng487
    @jasondeng487 2 года назад

    He deserve all our tuition payments, he is the GOAT.

  • @arv-Hackney-London
    @arv-Hackney-London 4 года назад +1

    Studying CIMA and none of my materials explained the equations better than you. Thank you so much.

  • @sukidakara5806
    @sukidakara5806 2 года назад

    I HAVE MIDTERMS EXAM ABOUT THIS TOMORROW. I DID NOT UNDERSTOOD A THING WHEN MY PROFESSOR TAUGHT US THIS BUT YOU MADE IT SO EASY! THANK YOU VERY MUCH FOR THIS VIDEO!

  • @MyFinancialFocus
    @MyFinancialFocus 2 года назад +2

    I typically don’t like math, but I love this :)

  • @cmcmmcmc
    @cmcmmcmc 5 лет назад +5

    Amazing, so helpful in completing an assignment, much better then the book explanation and books useless equation breakdown.

  • @TheMrsCRAZYLICIOUS
    @TheMrsCRAZYLICIOUS 3 года назад

    this genuinely saved my life

  • @00sra
    @00sra 3 года назад +1

    This video helped me out so much! Thank you!

  • @wavecheck9332
    @wavecheck9332 11 дней назад

    This guy is a beast, grade saving

  • @accmasmali
    @accmasmali 9 месяцев назад

    Many thanks for your efforts. you made it unbelievably easy

  • @daniellejones1177
    @daniellejones1177 7 лет назад +1

    Just what I was looking for! Thank you so much for the clear teachings. Love the color codes and simple to follow and understand!

    • @isaiasjoe5795
      @isaiasjoe5795 3 года назад

      I guess im asking the wrong place but does anyone know of a trick to log back into an Instagram account..?
      I was stupid lost the login password. I love any assistance you can offer me

    • @milanahmad1685
      @milanahmad1685 3 года назад

      @Isaias Joe Instablaster =)

    • @isaiasjoe5795
      @isaiasjoe5795 3 года назад

      @Milan Ahmad Thanks for your reply. I found the site on google and I'm in the hacking process atm.
      Seems to take a while so I will get back to you later when my account password hopefully is recovered.

    • @isaiasjoe5795
      @isaiasjoe5795 3 года назад

      @Milan Ahmad It did the trick and I finally got access to my account again. Im so happy!
      Thank you so much, you saved my account :D

    • @milanahmad1685
      @milanahmad1685 3 года назад

      @Isaias Joe you are welcome =)

  • @margotjones6479
    @margotjones6479 2 года назад

    Thank you!! Clear and easy to understand!

  • @marvinschumann6832
    @marvinschumann6832 4 года назад +1

    Great video man! Very well explained!!

    • @Edspira
      @Edspira  4 года назад

      Glad it helped!

  • @EAFifaultimateteam11
    @EAFifaultimateteam11 5 лет назад

    Fantastic video. Explained fully and clearly. Thanks for sharing

  • @doreenandoh9918
    @doreenandoh9918 6 лет назад +1

    very good explanation. Thank you for the help.

  • @NehaSharma-sg9yd
    @NehaSharma-sg9yd 5 лет назад +3

    Just awesome explanation. Thanks for sharing🤩

  • @arushibarthwal8119
    @arushibarthwal8119 3 года назад

    thank you so much! you make it so easy!!

  • @lifecoaching_lk2482
    @lifecoaching_lk2482 2 года назад

    Great explanation. Thanks chief

    • @Edspira
      @Edspira  2 года назад

      I'm glad you found it useful. Best of luck to you!

  • @rzezagar
    @rzezagar 7 лет назад

    Great videos and a great channel! Thank you.

  • @tanishag9342
    @tanishag9342 28 дней назад

    thank you so much. you're wonderful

  • @florenciachoque6682
    @florenciachoque6682 4 года назад

    Thank you so much! :) Amazing explanation!

  • @vickyc1178
    @vickyc1178 7 лет назад

    Thanks for the video. Very helpful.

  • @Bookofshavings
    @Bookofshavings 3 года назад

    For those who are using excel and want a formula that uses 1 cell:
    adjusted S1= ([S1 value] + [S2 value]*[% of S2 allocated to S1])/1-[% of S2 allocated to S1]*[% of S1 allocated to S2]
    adjusted S2 = ([S2 value] + [S1 value]*[% of S1 allocated to S2] )/1-[% of S2 allocated to S1]*[% of S1 allocated to S2]
    Notice the percentages that divide on the bottom don't change, but the percentages and values on the other parts use the "reciprocal" of each other i.e they flip.
    Best of luck cost accounting students :)

  • @paigejohnson440
    @paigejohnson440 3 года назад

    I owe you my life

  • @yyourfacee
    @yyourfacee 8 лет назад +1

    Excellent videos, thank you :)

  • @bonghoykh5242
    @bonghoykh5242 7 лет назад

    Your video do help me to understand. Thanks

  • @wavecheck9332
    @wavecheck9332 11 дней назад

    Much appreciated!

  • @angelacui5358
    @angelacui5358 6 лет назад +1

    thanks for your clear explanation

  • @BoshraUSA
    @BoshraUSA 7 лет назад +3

    I would like to thank you for your great and awesome videos. I have a question
    You said the total cost of running both HR and Admin dept is ( $ 30,000, 40,000 ) respectively, but after calculating the cost rendered to each of service dept by each other, the total cost of both HR and Admin dept will be 48421+42105 = 90,526
    Can you explain why it is higher than the real cost incurred ?

    • @geoffreycosentino1165
      @geoffreycosentino1165 7 лет назад +4

      The last row of hours for HR and Admin represent costs between the two Support Departments and are not allocated to the product departments directly, using this method. They essentially cancel each other out. If you remove those costs from your total of 90526 (90526-8421-12105), it will give you the costs that are allocated --> 70 000

    • @ambitoiusheart
      @ambitoiusheart 7 лет назад

      Geoffrey Cosentino thank u. Got it

    • @roynotintown
      @roynotintown 6 лет назад +1

      Geoffrey Cosentino Somewhere I am still not convinced don't you think that it is (70000+12105-8421) = 73684 to be allocated to production departments as 8421 gets knocked off from 12105 and the balance adds to the unabsorbed cost i.e 3684 (12105 - 8421)

    • @jasminet89
      @jasminet89 5 лет назад

      @@geoffreycosentino1165 thank you so much for this explanation!

    • @abcsofuncoveringtruth9681
      @abcsofuncoveringtruth9681 3 года назад +3

      An easier way to look at it is to set up a Table, Remember its looking at how the costs are allocated across the different departments, by adjusting the costs from 30000 & 40000 to 42105 & 48421 respectively we already took into consideration the allocation between support departments therefore the only departments to look at again is Production
      Mountaineering Kayaking
      Costs allocated by HR (12/20)*42105 = 25263 (4/20)*42105 = 8421
      Costs Allocated by Admin (15/40)*48421 = 18158 (15/40)*48421 - 18158
      TOTAL 43,421 26579 =70,000
      Hope this helps

  • @Roberto-ik5hx
    @Roberto-ik5hx 7 лет назад

    this really helps, thanks !

  • @laughernine4320
    @laughernine4320 5 лет назад +6

    I'm so confused. What was the point of the equations if we again allocated costs back to the support departments? The way I understand it, the goal was to somehow allocate $70,000 of the support costs to the operating departments. I don't see how that was done. :(

    • @Frederico_El_Padrino
      @Frederico_El_Padrino 4 года назад

      That would be the Direct Method. As the presenter said, (paraphrase) this method is for allocating to not only the operating divisions, but to reciprocate between the support departments - because they utilize each other's time & services too. I had to watch it a few times plus the othe video on the long version (a couple times).

    • @abcsofuncoveringtruth9681
      @abcsofuncoveringtruth9681 3 года назад +1

      An easier way to look at it is to set up a Table, Remember its looking at how the costs are allocated across the different departments, by adjusting the costs from 30000 & 40000 to 42105 & 48421 respectively we already took into consideration the allocation between support departments therefore the only departments to look at again is Production
      Mountaineering Kayaking
      Costs allocated by HR (12/20)*42105 = 25263 (4/20)*42105 = 8421
      Costs Allocated by Admin (15/40)*48421 = 18158 (15/40)*48421 - 18158
      TOTAL 43,421 26579 =70,000
      Hope this helps

  • @mortimerlivan557
    @mortimerlivan557 3 года назад

    Bravo!

  • @JeremiahNuddFilms
    @JeremiahNuddFilms 3 года назад

    bless your soul

  • @logeswaran-sh9dx
    @logeswaran-sh9dx 4 года назад

    Thanks man ❤️

  • @jamiesalih7883
    @jamiesalih7883 4 года назад

    Is it possible to allocate three support divisions using recip method? Can you help with the algebra on this?

  • @Yaya4r56
    @Yaya4r56 7 лет назад +1

    Is this the fastest way?

  • @axel7918
    @axel7918 3 года назад

    thank you.

  • @phoenixkool
    @phoenixkool 6 лет назад +2

    Wait how did you allocate more than you have? Pls Explain

    • @cmcmmcmc
      @cmcmmcmc 5 лет назад

      not the most timely reply but, it is due to the allocation from the other support group and vice versa happening simultaneously in the solution, I.E. if you look at the set up there are cost hours going from HR to the Admin and back from Admin to HR, These "increase" the total allocation.

    • @abcsofuncoveringtruth9681
      @abcsofuncoveringtruth9681 3 года назад

      An easier way to look at it is to set up a Table, Remember its looking at how the costs are allocated across the different departments, by adjusting the costs from 30000 & 40000 to 42105 & 48421 respectively we already took into consideration the allocation between support departments therefore the only departments to look at again is Production
      Mountaineering Kayaking
      Costs allocated by HR (12/20)*42105 = 25263 (4/20)*42105 = 8421
      Costs Allocated by Admin (15/40)*48421 = 18158 (15/40)*48421 - 18158
      TOTAL 43,421 26579 =70,000
      Hope this helps

    • @salnjoycelascari3775
      @salnjoycelascari3775 2 года назад

      @@cmcmmcmc how would this increase the total costs of $70,000 ? You’re literally taking the 70K total support department costs and allocating to each support department appropriately. Makes no sense that there would be an additional 20,000 in costs incurred just because you allocated the total original costs. If you take some of the HR cost and allocate it to admin then, it doesn’t mean you’re increasing costs. You’re simply taking away from one support department and adding it to the other. Can you please explain?

  • @tiwakornmonthong5573
    @tiwakornmonthong5573 6 лет назад

    thank you so much

  • @yurain1972
    @yurain1972 7 лет назад +2

    What if you have three departments?

    • @rolandorivera8535
      @rolandorivera8535 6 лет назад +2

      yu Rain i kill myself hahaha

    • @Jenny-iz2fn
      @Jenny-iz2fn 6 лет назад

      yu Rain you can then calculate with Matrix

    • @jamiesalih7883
      @jamiesalih7883 4 года назад

      @@Jenny-iz2fn Did you ever figure out the answer to this?

  • @ashiwinisrinivas4899
    @ashiwinisrinivas4899 Год назад

    How did we get that 0.95

  • @shankare2286
    @shankare2286 Год назад

    Wish me luck. I have a CPA BEC Exam on Jul 12th 2023, Dang! 😬😬

  • @frankta4308
    @frankta4308 6 лет назад

    how do you get 20?

    • @BlueFirePS3
      @BlueFirePS3 6 лет назад

      12000/20000 is the same as 12/20

  • @zacharytammaro512
    @zacharytammaro512 Месяц назад

    So administrative costs (A) do not equal the administrative costs. Makes sense. Lol

  • @moviemadnizz
    @moviemadnizz 4 года назад

    Your Formula is not correct. It does not allocate the costs allocated to A (by H) back to H.
    This formula does not fit the reciprocal method you explained in your last video, this formula does less steps.
    I know math is hard... a doctor explained this to me, Thanks Doctor