HELP PLEASE!! with budgeting practice exam question

Hopeipassx

Hi,

Has anyone attempted the budgted practice exam 2 online?

Please could someone tell me how they worked out the "used in production" in £ in the materials budget, and the "closing inventory of finished goods" in the operation budget? It states "closing inventory will be valued at the budget production cost per unit".

Tried to copy and paste this but no luck.

Thanks,

siva

Hi,

Used in Production is the difference between the subtotal and closing inventory i.e., (Opening Inventory + Purchase - Closing Inventory)

Closing Inventory is obtained by Unit cost of production x Closing stock in units.

Unit cost of production is derived by total cost of production/ no of units produced.

I hope this helps.

if still not clear let me know.

Jo Clark

Is this Task 1.3 on Budgeting Practice CBT2?

SandyHood

Dear Other Forumites

Please note Hopeipassx's concerns. This exam is set by Tony Stevens who has a definite view about how it should be taught and it appears to me that Hopeipassx has been caught out by either using or being taught by someone who has used a different approach.

I strongly advise anyone studying budgeting, to study first.
You must really understand production budgeting whether the company uses First In First Out valuation of stock or Average Cost. If you are looking at an exam in the future, then delay looking at the mock/sample exams.
Work through all sorts of past exams at this level from any accounting body, and master the subject matter.

Then you'll enter the revision stage not needing to acquire any further knowledge, merely needing to hone your knowledge to meet the sorts of question a computer based exam night present.

My class today studied production budgeting in terms of a single product company looking at several accounting periods.
We came across opening and closing inventory of finished goods, dealing with production where a % of the total produced is not saleable, raw material inventories, (raw material wastage comes next week), labour at below 100% efficiency.
And dealing with shortages in terms of raw material availability, or a mix of periods where there is a shortage or a surplus of either available material or labour - and then re-scheduling production based on inputs rather than sales.
Not focused on CBE questions in the slightest. Instead (in week 2 of our course) looking at mastering the generic topic of production budgeting and a solid foundation of knowledge.

it is up to you, but I know that the acquiring knowledge first and then preparing for the exam afterwards has worked in the past, and is the approach the examiner is hoping for.

welshwizard

I like the cut of your jib Sandy!

I have been usin the same principles for the L3 AP1 & 2. My students hate me during the teaching phase, but when we come on to assesment style questions, they think I am the bees knees as the questions are miles easier than those they have come across before. I encourage every student to thoroughly prepare by learning what you're doing and why you're doing it and not just rely on rote learning! It'll pay dividendd in the long rum - particulalry with costing units!

Hopeipassx

Thank you so much siva,you have been a MASSIVE help!!!!!! :001_smile:

siva

You are welcome.