# June 2007 PCR

Registered Posts: 3 New contributor 🐸
Does anybody know how the opening and closing balances (amounts) are calculated for the operating statement? If you know please help me to understand it as well.

Mini

• Registered Posts: 20 New contributor 🐸
Hi,

I am having the same problem, I have worked out that the costs are for the whole of production - not just sales so the procedure is

1 - divide the cost of sales (materials labour and overheads) by the number of products made (total from production budget)
2 - Multiply the answer by the opening or closing stock quantity.

This works for all but the opeining stock of the luxury model and I just cannot see how they got the figure they did

Hope this may be of some help?

Barbara:thumbup1:
• Registered Posts: 1 New contributor 🐸
Hi Barbara - I just want to say a BIG thank you for this calculation you provided - I tell you I have been studying this question for 2 hrs - trying to think of all the logical calculations to get to the answer - but with no joy. I decided to come on to the forum to see if anyone had the same problem - I am not surprised that quiet a few people got stuck at the same hurdle - which is not good. Anyhow thanks again - you have saved my husband from a serious temper tantrum!!
• Registered Posts: 40 Regular contributor ⭐
Spent ages wasting time on this last night, its really annoying, how have they got the figure for the Luxury models' stocks???

Think I'm being stupid here but why is their answer Add Opening, Less Closing Stock? I thought you Add closing and Less opening??? :crying:
• Registered Posts: 97 Regular contributor ⭐
Thanks for this - I was just having the same problem looking at it - I could not figure out where the answer came from!!
• Registered Posts: 97 Regular contributor ⭐
fpettifer wrote: »
Spent ages wasting time on this last night, its really annoying, how have they got the figure for the Luxury models' stocks???

Think I'm being stupid here but why is their answer Add Opening, Less Closing Stock? I thought you Add closing and Less opening??? :crying:

You add closing less opening on the production budget.

this is the operating statement so you add opening stock as it is used in that period, and deduct clsoing as it is used in next period (I think!!)
• Registered Posts: 404 Dedicated contributor 🦉
in pcr december 2005 qu 1.4 c they have taken off the figure for opening stock and its an operating statement, so it seems like they have answered this the opposite way round and i right in saying that?this is so confusing.

I'm really starting to dislike the last question in section one i can't seem to get it right, anyone else feel like this.
• Registered Posts: 97 Regular contributor ⭐
lorraine wrote: »
in pcr december 2005 qu 1.4 c they have taken off the figure for opening stock and its an operating statement, so it seems like they have answered this the opposite way round and i right in saying that?this is so confusing.

I'm really starting to dislike the last question in section one i can't seem to get it right, anyone else feel like this.

Dec 05 ''a budgeted operating statement showing for each product the total turnover,
total expenses and total contribution.''

Jun 07''the budgeted operating statement for each model and for the whole company''

I think it is because the 2 questions are asking for different things.

05 - wants total turnover (so you have to add back in the opening stock), expenses and contribution
07 - Wants a complete OS not just specific items.

Not 100% sure though!
• Registered Posts: 92 Regular contributor ⭐
Thanks for your help on this one, i was searching trying to find the answer thinking it was obvious since they hadn't shown the calculation in the model answers.

I thought this was the easier of the 3 papers till I tried the June 07!!

Mke