# 2013 Budgeting task 2 help

Jobijo
Just JoinedRegistered Posts:

**7**
Hi

Can someone help me with task 2 of the new online tests?

On both of them I am stuck on task 2.

I saved the most recent till last so it would be fresh in my mind and now i am worries as my exam is this afternoon!

AAArrrrrrrrr!!!!!

Can someone help me with task 2 of the new online tests?

On both of them I am stuck on task 2.

I saved the most recent till last so it would be fresh in my mind and now i am worries as my exam is this afternoon!

AAArrrrrrrrr!!!!!

0

## Comments

4How I worked it out was like this,

a)

It says the closing inventory(CI) should be 12.5% of the following weeks sales volume, so ...

Week 1 CI is 12.5% of week 2 sales volume, week 2 450 x 12.5% = 56.25 round up to 57.

Saleable products = sales volume - OI + CI = 382 (400 -75 + 57 = 382)

It says 15% of all production fails quality control and is rejected, so therefore the saleable products must equal 85% (100% - 15%)

The rejected production is the 15%

Total manufactured is 100%

b)

800 items x 14 litres = 11,200, there is an 8% waste.

So 11,200 / 92% = 12,173.913 or 12,174 ltr

12,174 ltr - OI 700 + CI 500 = 11,974 ltr

c)

65,000 items X 4 minutes = 260,000 minutes

260,000 / 60 = 4,333.33 or 4,334 hours

20 staff X 175 hours = 3,500 hours

4,334 - 3,500 = 834 hours overtime

d)

7,410 units X 3 minutes = 22,230 minutes

2,230 / 60 = 370.50 hours

370.5 - 350 hours available = 20.5 hours to be subcontracted

20.5 hours X 60 = 1,230 minutes

1,230 / 3 minutes per unit = 410 units to be subcontracted.

Hope you get this in time.

7Sorry for the delayed reply….I passed!!

Thank you!!

452Hi Luke,

why do we deduct the open inventory away from the sales volume please? ( i know this is the right answer but can not understand why)

Surely the open inventory is saleable but the closing inventory is not as it needs to be carried over to the next period ..

don't understand this at all

Thanks for calculation above by the way

452782452Thanks a lot NPS your an absolute wizard makes perfect sense now :001_smile: