Budgeting Exam Questions...Please Help

stephleedz

Can anyone help me with how to work out the answer of this questions. It looks so simple and I cant for the life in my workl this out! Doing my head in.

Calculate the appropriate budgeted overhead recovery rate for the following production department. The department's annual budget for indirect costs is

Indirect Labout £4250
Supervisor Wages £19000
Depreciation of Equipment £15000
Macjine Maintenance £3000
Canteen Subsidy £8750

Total £50000

The bidgeted production of 5000 units will require 20000 machine hours and 10000 direct labour hours.

Answer: Overhead recovery should be based on............. The Recovery rate will be £.....per.......

Thanks

Steph

SandyHood

Total budgeted overhead for the year divided by budgeted machine hours

You ought to have done this as part of level 3 costs and revenues

stephleedz

Thank you for your response.

uknitty

Hi Steph

Good Luck in your budgeting exam, I did mine 3 weeks ago so I am just waiting on the results now.

The CBA is pretty much identical to the practice ones

stephleedz

Unkitty,

Thank you very much for the support. I have my exam booked for Tuesday 15th November. I started revising yestersday going through the revision kit I was given in class by my Kaplan tutor. That is really good to hear. Fingers crossed you get your results within the next couple of weeks? Let me know how you get on?

Steph

uknitty

The questions in the Kaplan revision kit are very much in line with what came up on my actual exam. If you are comfortable with the questions in the revision kit you will have nothing to worry about come the real exam

stephleedz

Thank you UKitty, really appreciate knowing that. I really wish the Level 4 exams were like the Level 2 and 3 exams in that there were no written parts...not so good with theory but good with number, give me numbers any day!

Steph

nicd1981

hi steph i have my budgeting exam the same day as you 15th, i missed first 4 weeks of budgeting as had to do another course part of an apprenticeship but didnt wanna miss exam so have revised and bought the books to self teach. Im quite worried about it but am doing practice papers to see where im going to struggle and realise wastage on materials is definitely not my strong point! and also some parts of operating statements! haha have alot to learn before this exam, good luck , and did you buy the books , theyve been a massive help to me

nic x

SandyHood

Understanding wastage is an area that has bugged candidates in the past

See postings below

SandyHood

When you look at wastage of finished goods

1. Find the total volume of saleableable finished goods that need to be produced (Sales +Closing stock (FG)-Opening stock(FG)If there has been any wastage, it must be lower than the total production)
2. The wastage percentage is typically a % of the total production. And 100% less this % is the % of goods produced that are saleable
3. Divide the saleable production by the % of saleable goods

SandyHood

When you look at wastage of materials in the production process

1. Find the total production (from the above) and mulitply this by the material needed per unit to give the total good material needed for production )
2. The wastage percentage is typically a % of the material input into production. And 100% less this % is the % of the good material as a % of the material input
3. Divide the good material by the good material % of material input

SandyHood

When I take revision days, there have been times when students have had some unrealistic ideas.

I try to overcome this by describing apple pie production

The saleable apple pies are determined by the sales forecast + cl stocks - op stocks
the burnt apple pies as a % of total apple pie production are built into production to find
total apple pie production

Total apple pulp required is found by - total apple pie production x apples per pie
Total apples include the peel and core and typically the % of the whole apple is given
The total apple pulp divided by the pulp % of the whole apples gives the total apples needed for production

You then add cl stock of whole apples and add opening stock of whole apples to find the purchases required