Budgeting help please

HoamaiHoamai New MemberPosts: 10Registered
Hi all,
I am doing practice assessment 1 in workbook (osborn), task 2.2:
original actual flexed
volume (unit) 90000 80000 80000
energy (£) 55000 55000

the fixed element is £10000

the answer for flexed is £50000.

I tried to work out many ways like hight -low but can not find the correct answer for the flexed budget.
I would appreciate if you guy can show me how to get the answer.

Comments

  • coojeecoojee Experienced Mentor Posts: 794Registered
    Hoamai wrote: »
    Hi all,
    I am doing practice assessment 1 in workbook (osborn), task 2.2:
    original actual flexed
    volume (unit) 90000 80000 80000
    energy (£) 55000 55000

    the fixed element is £10000

    the answer for flexed is £50000.

    I tried to work out many ways like hight -low but can not find the correct answer for the flexed budget.
    I would appreciate if you guy can show me how to get the answer.

    With flexed budgets you're only ever looking at the original budget figures so in the original budget you had energy costs of £55,000 for a volume of 90,000 units. Of this £10,000 was fixed so £45,000 was variable, this equates to £45,000/90,000 = 50p per unit. Now apply this to the flexed budget - 80,000 units x 50p = £40,000 plus the fixed part of £10,000 makes £50,000.
  • HoamaiHoamai New Member Posts: 10Registered
    Thank you very much coojee. I am clear now
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