Budgeting Practice Assessment 1

AATnovice

hey

Sorry I cannot get my head around how they have the (Closing inventory of finished goods) figure.

the question is tast 1.3 the operating budget..

please help :001_smile:

Nps

Do you mean the £5000 figure in the first table, or do you have to calculate something further down?

If it's the £5000 in the first table, it's just the total of the opening inventory, plus the production total (4,000 and 30,000) minus the sales (29,000) leaving you with £5000 left in the closing inventory.

Nps

Ah, I can see you have to calculate a closing inventory price further down which I now assume is the one you are asking about (sorry!)

The total costs of production are £60,000 (27200+26400+6400). You know this produced 30,000 items and that 5000 of them are in the closing inventory. Therefore 60000/30000 x 5000 = £10000

AATnovice

you are a star *******

Thank you