Budgeting question, steped cost

ms sadat
ms sadat Registered Posts: 39 Regular contributor ⭐
in AAT Level 4 (Level 8 in Scotland)
in monthly operating statment.
budget unit volume is 76000.
Actual unit volume is 80000.
Flexed budget volume is 80000.

Equipment hire budget cost is £48000.
Equipment hire actual cost is £50000.

The budget for equipment hire is Steped ,increasing at every 15000 units of monthly production.


I have the answer for equipment flexed budget which is £48000 , but i dont know how becos we got another question where

budget units volume is 76000.
actual units volume is 72000.
flexed budget units volume is 72000.

equipment hire cost budget is £48000.
equipment hire cost actual is £42000.

and again The budget for equipment hire is Steped ,increasing at every 15000 units of monthly production.
i have the answer for flexed budget for equipment which is £ 40000.
i am kind of confused
anybody who can help .appreciated.

Comments

  • Woooof
    Woooof Registered Posts: 174 Dedicated contributor 🦉
    ms sadat wrote: »
    in monthly operating statment.
    budget unit volume is 76000.
    Actual unit volume is 80000.
    Flexed budget volume is 80000.

    Equipment hire budget cost is £48000.
    Equipment hire actual cost is £50000.

    The budget for equipment hire is Steped ,increasing at every 15000 units of monthly production.

    First you need to work out the cost per stepped cost. 76000/15000 = 5.066 so 6 steps are needed.

    £48000 / 6 steps = £8000 per step

    For the flexed budget you do: 80000/15000 = 5.333 so 6 steps again, so the flexed amount is the same as previously (£48000)
    ms sadat wrote: »
    budget units volume is 76000.
    actual units volume is 72000.
    flexed budget units volume is 72000.

    equipment hire cost budget is £48000.
    equipment hire cost actual is £42000.

    and again The budget for equipment hire is Steped ,increasing at every 15000 units of monthly production.
    i have the answer for flexed budget for equipment which is £ 40000.
    i am kind of confused
    anybody who can help .appreciated.

    As the original figures for working out the cost per step is the same we just do the second part.

    72000/15000 = 4.8 so 5 steps are needed

    5 steps * £8000 = £40000

    Hope that helps :)
  • ms sadat
    ms sadat Registered Posts: 39 Regular contributor ⭐
    Thx Wooof...!
    Appreciated . totally got it now ..

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