TACOS!!!
jessbill3
Registered Posts: 17
Please can somebody help with this question, I know its one of the easier ones but its just thrown me!
Calculate a sales rev forecast for year 5
Use the sales price index to calculate sales rev for years 1 to 4 at year 1 prices
Project the sales rev at year 1 prices forward to year 5
Calculate the year 5 sales rev forecast
Year 1 Actual Year 2 Actual Year 3 Actual Year 4 Actual Year 5 Actual
Sales Revenue 1,200 1,323 1,500 # #
Sales Price Index 112.0 114.0 120.0 124.0 128.0
Sales rev @ Y1 Prices # # # # #
I understand the layout is poor when i post this discussion  the years 15 are along the top in the table and then there are 3 rows
(Fill # in...)
Its the only question like it in the Revision Kit i can find, and the answers dont explain how to figure it out
I believe its indexing, but its thrown me, i dont know whether its the layout or what
please can somebody help me?
Thanks
Calculate a sales rev forecast for year 5
Use the sales price index to calculate sales rev for years 1 to 4 at year 1 prices
Project the sales rev at year 1 prices forward to year 5
Calculate the year 5 sales rev forecast
Year 1 Actual Year 2 Actual Year 3 Actual Year 4 Actual Year 5 Actual
Sales Revenue 1,200 1,323 1,500 # #
Sales Price Index 112.0 114.0 120.0 124.0 128.0
Sales rev @ Y1 Prices # # # # #
I understand the layout is poor when i post this discussion  the years 15 are along the top in the table and then there are 3 rows
(Fill # in...)
Its the only question like it in the Revision Kit i can find, and the answers dont explain how to figure it out
I believe its indexing, but its thrown me, i dont know whether its the layout or what
please can somebody help me?
Thanks
0
Comments

Hi
I've just done Budgeting so it's all fresh in my head
To work out the bottom row value, you need to divide the actual sales by the index for that year then multiply by the year you want to get to.
So the first value will be 1200, then 1300 and 1400.
You can use this trend to establish that Y4 and 5 will be 1500 and 1600, then use these figures to work out the actual sales for Y4 and Y5:
e.g. for Y4 it will be 1500 / 112 x 124 = 1661 (as 1500 is the actual sales at Y1 prices we divide by the index for Y1, then multiply by the index for the year we want to get to Y4)
Hope this helps0 
Hi
Ahhh perfect then!
Brilliant, that helps a lot  just a shame there arent more of those questions for me to practise! nevermind! thanks again for your help!0
Categories
 All Categories
 1.2K Books to buy and sell
 2.3K General discussion
 12.5K For AAT students
 318 NEW! Qualifications 2022
 156 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