BUDGETING PRACTICE ASSESSMENT 2&4 AQ2010
leption
Registered Posts: 36
My first question is on Practice Ass 2, 2.1 (AQ2010). The question is:
This years budget for raw material was set at £216,300. This assumed a 3% increase in production volume and a 5% increase in raw material prices compared with the previous year.
However production volume is 10% higher than the previous year and there has been no price increase.
Calculate the material cost forecast?
My second question is on Practice Ass 4, 2.1 (AQ2010).
This years budget for raw material was set at £302400. This assumed a 4% reduction in production volume and a 5% increase in raw material prices compared with the previous year.
However the production volume is 6% lower than the previous year and therefore there has been no price increase.
Calculate the material cost forecast?
Any help please.
This years budget for raw material was set at £216,300. This assumed a 3% increase in production volume and a 5% increase in raw material prices compared with the previous year.
However production volume is 10% higher than the previous year and there has been no price increase.
Calculate the material cost forecast?
My second question is on Practice Ass 4, 2.1 (AQ2010).
This years budget for raw material was set at £302400. This assumed a 4% reduction in production volume and a 5% increase in raw material prices compared with the previous year.
However the production volume is 6% lower than the previous year and therefore there has been no price increase.
Calculate the material cost forecast?
Any help please.
0
Comments

question 1 regarding material cost forecast
y= last year's material cost
(y * 1.03) * 1.05= £216,300
(last year's forecast multiply 3% increase in volume multiply 5% increase in price)
we need to remove the 5% increase in price now:
(y* 1.03)= £216,300/1.05
(y*1.03)= £206,000
now we need to remove the 3% increase in volume:
y= £206,000/1.03
y=£200,000
last year's material cost was £200,000
we need to add 10% increase in volume which will give us the material cost forecast for this year
200,000 multiply 1.1= £220,000
0 
Thank you for explaining that, sorry to take so long to come back to you.0

Does anyone mind helping me with 1.4c and 2.1a assesment 2 20100
Categories
 All Categories
 1.2K Books to buy and sell
 2.3K General discussion
 12.5K For AAT students
 319 NEW! Qualifications 2022
 157 General Qualifications 2022 discussion
 11 AAT Level 2 Certificate in Accounting
 56 AAT Level 3 Diploma in Accounting
 92 AAT Level 4 Diploma in Professional Accounting
 8.8K For accounting professionals
 23 coronavirus (Covid19)
 272 VAT
 92 Software
 274 Tax
 136 Bookkeeping
 7.2K General accounting discussion
 201 AAT member discussion
 3.8K For everyone
 38 AAT news and announcements
 345 Feedback for AAT
 2.8K Chat and offtopic discussion
 582 Job postings
 16 Who can benefit from AAT?
 36 Where can AAT take me?
 42 Getting started with AAT
 26 Finding an AAT training provider
 48 Distance learning and other ways to study AAT
 25 Apprenticeships
 66 AAT membership