BDGT Assessment 2, Task 1.6

Hi was hoping if someone can help me to solve 2 parts of this question:

Asked to budget for an alternative scenario and to calculate the increase or decrease in expected profit from an operating budget.
Couldn't solve the Energy and Depreciation.

First Draft
1) Energy £113,400

Question asks to revise the energy price rise to 2.5% and assumptions in the first draft is that there is an allowance for an energy price rise of 5%.
ANSWER STATES: £110,700?

2) Depreciation: FIRST DRAFT = £39,200
Question says the Depreciation is a stepped cost increasing at every 8,000 units.

Been going over the question a lot of times but can't seem to work it out!

Many Thanks


  • Osato
    Osato Registered Posts: 1 New contributor ?

    1) first u have to take the 5% that was already in the energy price

    so £113,400 = 105%
    £ ? = 100%

    100 / 105 x 113400 = 108,000 price without any rises or assumptions

    then find the 2.5% and add it

    108,000 x 2.5% = 2700 +£108,000= £110,000

    is that how the second question is written out because its not making sense to me.

  • hkaur92
    hkaur92 Registered Posts: 28
    Thanks so much @Osato glad to get to the bottom of that question!
    I'll look further into the second question, will re-post the question if I'm still struggling.

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