Cost & Revenues Question Help

wbauk2002
wbauk2002 Registered Posts: 110 ? ? ?
Hi all

Got my CRS exam on sunday and was doing the practice cba

As was doing the budget vs flexed vs actual question

It gives you overheads for 100,000 units at 980

It says below overheads are fixed up to 120,000 units at £980, then after that fixed costs increase to £1228

Then you have to work out the flexed budget for 144,000 units, Actual overheads are £1228

I thought the flexed budget for OH's would be £1228 because its over 120,000 units, but I looked at answer sheet and its 980, so i am confused!

Cheers

Comments

  • omega man
    omega man Registered Posts: 283
    I remember this question very well and i e-mailed AAT about it and their chief accounts person mailed me back to say that tutors wanted a variance and so they keep the same figure on the overheads part in order to create a variance.
    He also said that both answers are correct,i just wanted to know how best to answer so as not to be marked down for it.
    Anyway i hope this all helps.
  • uknitty
    uknitty Registered Posts: 591
    When you create a budget you don't know in advance what the actual overheads are going to be....
  • wbauk2002
    wbauk2002 Registered Posts: 110 ? ? ?
    omega man wrote: »
    I remember this question very well and i e-mailed AAT about it and their chief accounts person mailed me back to say that tutors wanted a variance and so they keep the same figure on the overheads part in order to create a variance.
    He also said that both answers are correct,i just wanted to know how best to answer so as not to be marked down for it.
    Anyway i hope this all helps.

    Thanks omegaman the question really confused me because it tells you what fixed costs are going to be over 120000 units, then says its wrong

    Them saying both are correct doesn't help with real exam

    Glad someone else saw the problem, had no reply for ages and thought it was just me,

    Got my cost and revenues exam tomo, yes a Sunday, 10am
  • Clarekaye
    Clarekaye Registered Posts: 307
    How did you do in your exam? :001_smile:
  • wbauk2002
    wbauk2002 Registered Posts: 110 ? ? ?
    Passed, was so much harder than the practice assessments and was laid out different, and wording was different to the bpp books, started to panick for a bit, just had to do some reading
  • fairf
    fairf Registered Posts: 7 Regular contributor ⭐ ? ⭐
    In mid April the AAT told me that the note involving stepped fixed costs would be removed from question 2.4 in the (first) practice CBT. Unfortunately this does not appear to have happened yet.
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