Budgeting - Forcasting

Gkirk79
Gkirk79 New MemberRegistered Posts: 8
Hi All

Can anyone help with Q20 in the Kaplan Revision Book (Bedgeting)

This years sales are £4,000,000

Growth trend is expected at 20% per annum

Seasonal variations are as follows:

Q1 + £30,000
Q2 + £50,000
Q3 + £135,000
Q4 - £215,000

I am unsure how answers have been calculated

Q1 £585,000
Q2 £570,000
Q3 £540,000
Q4 £505,000

Comments

  • uknitty
    uknitty Experienced Mentor Registered Posts: 591
    I'm studying budgeting right now and I don't get it either. Feeling really stupid now.

    The total projected sales as per the answer = 2,205,000 per annum which is certainly not a 20% growth on the previous year *boggle*
  • Gkirk79
    Gkirk79 New Member Registered Posts: 8
    Are you using Kaplan study book as well ?

    Have you seen the example on pg 102 / 103?

    I am trying to see what I am missing
  • uknitty
    uknitty Experienced Mentor Registered Posts: 591
    Not using the Kaplan books sorry - I have Osbourne, but I've had similar questions in my texts. The technique I usually use doesn't work here though so ... I don't know !
  • SandyHood
    SandyHood Font Of All Knowledge Registered, Moderator Posts: 2,034
    This looks more like it:
    Quarter £
    Q1... 1,230,000
    Q2... 1,250,000
    Q3... 1,335,000
    Q4..oo. 985,000
    Total. 4,800,000
    Sandy
    [email protected]
    www.sandyhood.com
  • Gkirk79
    Gkirk79 New Member Registered Posts: 8
    Hi Sandy

    Thank you for your help how have Kaplan calculated the following answers

    Q1 £585,000
    Q2 £570,000
    Q3 £540,000
    Q4 £505,000

    Are these errors ?
  • babsa
    babsa Well-Known Registered Posts: 118
    is there any more details to teh question?
  • rekha0303
    rekha0303 New Member Registered Posts: 7
    Hiya

    This years sales are £4,000,000

    Growth trend is expected at 20% per annum

    Because of the growth it means that now the year sales will be forcasted at 120%

    New Sales = 120% * £4,000,000 = £4,800,000

    Because of the 4 quarters divide £4,800,000 by 4 = 4800000 / 4 = 1,200,000

    Thus

    Q1 + £30,000 + 1,200,000 = +£1,230,000
    Q2 + £50,000+ 1,200,000 =+ £1,250,000
    Q3 + £135,000+ 1,200,000 =+ £1,335,000
    Q4 - £215,000+ 1,200,000 =+ £985000

    Important point for Q4 in this question~ remember there is a minus sign in front of 215000 so instead of adding it to the 1200000 subtract it from 1200000 to get 985000

    Check: 1,230,000 + 1,250,000 + 1,335,000 + 985000 = £ 4,800,000

    Point to remember:

    Growth~ add the given % to 100% to represent the new value for sales

    Negative effect to trend ~ deduct the given % from 100% to r sales epresent the new value foe

    Please note that some answers provided by Kaplan are completely wrong!!!!

    Cheers

    Rekha
  • rekha0303
    rekha0303 New Member Registered Posts: 7
    #8 Today, 13:33
    rekha0303
    New Member Join Date: Jun 2010
    Posts: 3





    Hiya

    This years sales are £4,000,000

    Growth trend is expected at 20% per annum

    Because of the growth it means that now the year sales will be forcasted at 120%

    New Sales = 120% * £4,000,000 = £4,800,000

    Because of the 4 quarters divide £4,800,000 by 4 = 4800000 / 4 = 1,200,000

    Thus

    Q1 + £30,000 + 1,200,000 = +£1,230,000
    Q2 + £50,000+ 1,200,000 =+ £1,250,000
    Q3 + £135,000+ 1,200,000 =+ £1,335,000
    Q4 - £215,000+ 1,200,000 =+ £985000

    Important point for Q4 in this question~ remember there is a minus sign in front of 215000 so instead of adding it to the 1200000 subtract it from 1200000 to get 985000

    Check: 1,230,000 + 1,250,000 + 1,335,000 + 985000 = £ 4,800,000

    Point to remember:

    Growth~ add the given % to 100% to represent the new value for sales

    Negative effect to trend ~ deduct the given % from 100% to represent the new value for sales

    Please note that some answers provided by Kaplan are completely wrong!!!!

    Cheers

    Rekha
  • SandyHood
    SandyHood Font Of All Knowledge Registered, Moderator Posts: 2,034
    Gkirk79 wrote: »
    Hi Sandy

    Thank you for your help how have Kaplan calculated the following answers

    Q1 £585,000
    Q2 £570,000
    Q3 £540,000
    Q4 £505,000

    Are these errors ?

    I think you know they are

    Good for you.
    I takes confidence to recognise an error in a book, and that confidence comes from understanding the topic well.

    I assure you, there will be people too scared to attempt an answer before looking at what the book says the answer is.
    You can be proud that you are not one of them.
    Sandy
    [email protected]
    www.sandyhood.com
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