Budgeting Extended Writing - any tips?

Whirlwind

Hello,

Yet again, I am a bit stuck with the extended writing section of a unit!!

In Feb I got an 'exceeded' for all parts of the Costs&Revenues exam (shockingly), have used the greenlight and Osbourne quiz already for BGT, so not too stressed with calculation side of things but when I get to the extended writing section its panic stations!!

The FNST (passed in Oct) written sections answers seemed to be smaller in content by comparison to the bits I have come across in BGT. Is there a pattern to the amount that answer needs to contain, besides answering the question?!!?

I have a few weeks before the exam and plan to complete the mocks in back of BPP question bank, the AAT online CBAs and a few archive papers I have found, but was wondering if anyone had any tips that could help me on my way?!!

Sorry to be a pain!!

Jo Clark

Whirlwind wrote: »

The FNST (passed in Oct) written sections answers seemed to be smaller in content by comparison to the bits I have come across in BGT. Is there a pattern to the amount that answer needs to contain, besides answering the question?!!?

I may be wrong in my view of the written section of level 4 exams, however I feel that it is quality of answer provided (covering all salient points) and not the quantity written that the examiner will be looking for.

Ensure you read the question carefully and answer what is being asked, not what you think the question is/want you want to answer

Have you looked at the AAT guidance on extended writing tasks for BGT? The written part is testing your communication skills as well as your knowledge of budgeting.

Sorry to be a pain!!

No pain at all - just hope this helps you focus your revision for the written section.

All the best and good luck.


JC

guinea pig

Hi Whirlwind,
I analysed the answers to the practice questions and found that they are usually based on a budget submission, variances or operating statement, replies are often as an e-mail, and made some notes, which may help;
BUDGET SUBMISSION
I attach the proposed *** budget for next year for your consideration and approval.
What the budget is based upon e.g increased volume of sales~give figures/% change
and what assumptions this lead to; e.g increased staffing
consider effect on;
material prices/labour prices/material quantitites/labour required
overall impact of above e.g effect on profit
Other possible changes e.g. world price increases
Please let me know if you need any further information
Kind regards, etc
also; quote where info has come from e.g. HR manager, suppliers
calculate increases/decreases as figures/%
VARIANCES ~reasons for;
I have reviewed the results for ****
Quote; actual profit, compare to budget & possible reasons
Detail variances, whether positive/adverse, by how much (%) & suggest why
Remark & investigate if variance cannot be explained/is very high
Analyse knock on effect e.g incresed advertising, increased sales
Please let me know if you need any further information
Recommendations;consider & understand usefulness of budgets for;
~Planning ~ gathering information, check targets, resources, challenges
~Authorisation~assign responsibilities for specific areas & overall
~Control~check actuals against forecasts, take corrective action where possible
~Co-ordination~involve & communicate to team, goal congruence
OPERATING STATEMENT
I attach the Operating Statement for ***
Note if this has been prepared using a flexed budget, and
make comparison with original budget for the period.
Check actual operating profit & compare with flexed op profit
Detail variances, if adverse/favourable & reason why, maybe;
Sales/turnover total
Selling price per unit changed
Labour ~ different rates/no of hours/idle time/overtime premium
Power ~ change in tariff?
Materials, Marketing, Distribution ~ rise in fuel costs ? Admin costs
Suggest investigate specific large variances
Behaviour of costs may have changed/been treated wrongly
e.g fixed, variable,stepped
Summarise overall, and if possible suggest main reason for difference
Hope this helps,
GP

Spamkebab

I'm also flapping a little bit with this part of the exam. I have the exam in a fortnight and although confident with the numbers aspect of budgeting, i am crap at writing. All these big new words are hard to get my head around, i say new words, of course i have heard them all and used some of them in my lifetime. I think i'm trying to make a silk purse out of a pigs ear sometimes, you can take the boy out of Manchester and all that. Does anyone else have this problem or does accountancy speak come natural to you all?

That reply is fantastic GP.

Whirlwind

Wow - thank you so much for such speedy and detailed responses!!

GP your reply was so much more than helpful it was amazing!!

Spamkebab - I work in an Accountancy practice but dont think I will ever get my head around the wordy side of things, so you are not alone. All the best with the exam!!

Thanks again!

villapb

In my budgeting exam, which was out of the blue, how slowing down a production line would help stop waste and its effects, so used common sense and stuck to a fromat.

villapb

Hi whirl that made me smile, we love numbers but hate words.........

Morpheus1980

I have my Budgeting exam tomorrow and not looking forward to it in the slightest! Happy with the numbers part, but the written tasks fill me with fear. Revised quite a bit today, but not confident that I'll remember everything tomorrow morning! Oh well, if I don't know it now, I'll never know. If all else fails, I shall just try to fudge it and look forward to a nice cold beer as reward tomorrow evening :001_smile:

Good luck to all taking BGT!

guinea pig

Hi all,
I've completed Budgeting, am now studying Financial Performance, and find that the two subjects do overlap, especially with analysing variances, budget control etc. If you are finding the format etc for written answers challenging, It might be helpful for you to also look at the practice written questions & answers for the FNPF exams, and guidance for extended writing tasks. As villapb says, a lot of it requires a common sense approach, and "thinking outside the box"
GP

Morpheus1980

Thanks guinea pig, I shall have a quick look at the Financial Performance practice CBTs.

I realise that my last post wasn't particularly helpful, so I had a look at the Mapping Document for BGT on the AAT website to see if I should be a bit more specific in my revision. I know there was talk on the forum about a question on the BGT paper about the life cycle of a product, and the Mapping Document does mention this in it's criteria, so I guess we should be prepared incase this crops up. Actually looking at the Mapping Document makes me feel a little more confident so I strongly advise people to have a little look for extra guidance.

Spamkebab

Arghh i have nothing in my study texts about the life cycle of a product? Is it about materials purchased for manufacture or resale, materials manufactured into goods, goods held for sale and then goods sold to customers?

Could anyone please explain this type of question?

Thanks

Neil

Whirlwind

It's made up of 5 stages: Development, Launch, Growth, Maturity, Decline. It's on page 69/70 of BPP text book.

Development and Launch: large outgoings as develop product, purchase non current assets, advertising and promotion, sales low, poss making loss at this stage.
Growth: if successful launch then rapid increase in sales, profits covering costs created earlier. High sales won't continue indefinitely.
Maturity: demand slow down, sales volume more constant, if product modified poss surge in sales.
Decline: market bought enough of product, sales decline, consider not producing.

Need to be sure what part of life cycle product in when using trends for forecasting. If trend based used for forecast trend is based on growth but product actually in decline then overly optimistic forecast of sales.

I tried to remember it in line with ageing! Pregnancy, birth, growth, maturity and growing old!!

Spamkebab

Thanks Whirlwind. I'm with Kaplan and i can't find this in the budgeting study text.

Morpheus1980

I'm with Kaplan too, and you're right, there's nothing about the life cycle of a product in their textbooks.

Just finished the exam. Even though I was dreading the written part, it's actually not that bad when you're forced to do it.

I recommend spending time after you've finished going through the whole exam, checking your answers. I did that today and found that I had made several errors - glad I had the opportunity to put that right!

As long as you do the practice CBAs, you should be fine.

Spamkebab

Thanks Morpheus.

Like i said, i'm pretty confident with the numbers and passed the first mock first time. I'm saving the 2nd mock till nearer my exam day. Can you remember any of your written questions?

Good luck with your result.

Neil

Morpheus1980

Am I allowed to say? Apologies for asking, I'm only a newby and don't want to get into any trouble!

However, if you do a search on the forum under 'Budgeting' there are a couple of threads (one in particular) that mentions subjects that have cropped up in the exam and as long as the exam questions don't change and aren't random, it may prove very handy for you.

AuntieT

I've always hated doing the long written tasks.

And do admit to not doing as many in practice and I did the numbers..

I agree that it's quality rather than quantity that's needed, probably only because I often felt rushed when I got to that part of exam.

Having finally completed Level 4 (although still awaiting certificate) I think my advice/ thoughts are that I imagined I was explaining it to a friend in the pub on a busy night. Get the points needed to be made over and move on!

That may sound a bit daft but now with hindsight can see that when I'd spent hours at the weekend trying to "Do" a paper, did meet up with friend (who has absolutely no knowledge of accounts) and was moaning about how hard it was to "do " the "long written bits" she often asked "what was the question and what did you say"! I obviously shortened my response but even so they'd reply - I have no idea what you've just said but it sounds convincing!

Hope that helps!

Spamkebab

Lol I hope your friend from the pub marks my exam then.

I know what you mean though, i can rant about it all day. I was explaining about having to know and understand all the different IFRSs for FNST to my dad before the exam and it suddenly hit me that i had just told him what i had to write.

guinea pig

With regard to Life cycle costing - I've just come across it in the Cost Management chapter of the BPP Financial Performance book. It is also in the Decision making chapter, where discounted cash flow is used to calculate the Net Present Value of e.g. a piece of equipment, over its useful life, to give the Life cycle cost.
So for everyone studying Budgeting now, even if you are not doing FNPF quite yet, it may be worth getting the text book now for further clarification on the subjects that cross over.
I'm taking FNPF soon, and I'm constantly referring back to other books e.g Budgeting, Credit Management to get it all in perspective.
GP