# Budgeting - Forcasting

Registered Posts: 8 Regular contributor ⭐
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

• Registered Posts: 591 Epic contributor 🐘
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*
• Registered Posts: 8 Regular contributor ⭐
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
• Registered Posts: 591 Epic contributor 🐘
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 !
• Registered, Moderator Posts: 2,034 mod
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
sandy@sandyhood.com
www.sandyhood.com
• Registered Posts: 8 Regular contributor ⭐
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 ?
• Registered Posts: 118 Dedicated contributor 🦉
is there any more details to teh question?
• Registered Posts: 7 New contributor 🐸
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

Cheers

Rekha
• Registered Posts: 7 New contributor 🐸
#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

Cheers

Rekha
• Registered, Moderator Posts: 2,034 mod
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
sandy@sandyhood.com
www.sandyhood.com