Cash MGT Osborne Workbook Chap 3

MWAUGH1983

Hi,

Was wondering if people could advise the answer on the following.

Question 1 B

I am asked to find the forecast trend for january and variation - im finding this a bit tricky.

Would appreciate if anyone could advise?

Cheers
Martin

Jo Clark

Hello Martin

Can you type the full question out as some of us don't have the Osborne books, or is it too long?

Thanks.


JC

MWAUGH1983

No bother Jo

Details as follows:

Month Sales Trend Month Var
Vol


Aug 56,160

Sept 35,640 41,040 -5,400

Oct 31,320 42,120 -10,800

Nov 59,400 43,200 16,200

Dec 38,880

Monthly sales Vol 1,080

BOLD ARE ANSWERS WHICH ARE WORKED OUT

Additional info

Price p/unit has been set at £5
Monthly pur 60% of the value of the forecasted sales
Seasonal var operates on a 3 monthly repeating cycle


Then it asks to get the forecaste trend, variation, forecast sales vol, forecast sales/pur


Cheers Jo

Martin

MarkT

Hi Martin,

The first part is the trend of how the numbers change so you get the figure of 1080.

The variation is worked as the Monthly sales minus the trend so 35640 - 41040 = -5400

The question then states that the variation is on a 3 month cycle and so effectifevely month 1 is -5040, 2 is -10800 and 3 is 16200

The answer for January is:

:Forecast Trend 45,360 (43,200 +2x1080)

:Variation -10,800 (December would have been -5400)

:Forecast Sales Volume 34,560 (45,360 - 10,800)

:Forecast Sales £172800 (45,360 x £5)

:Forecast Purchases £103,680 (60% of £172,800)

Hope this helps - We just went over this part of CMGT last night - so its pretty fresh in mind