Sample assessment 2- Task 2 b

Hi all,

I am just trying to prepare for the synoptic assessment so going through the sample papers. I am struggling to understand hwo they have worked out the below figures:

Flexible budget calculations: Turnover 1,890.0; direct materials 453.6; direct labour 283.6; production overhead 378.0; selling & distribution costs
189.0; (fixed costs 73.8 (unchanged); total costs 1,378.0; operating profit 512.0).

The budgeted cost figures have been derived just as a % of the budgeted turnover; for example direct materials are 24%; direct labour is 15%; production overheads are 20%; and selling & distribution costs are 10%.

Any help would be much appreciated thanks so much.


  • Megan1Megan1 Posts: 25Registered
    1890=15120*1575/12600, 453.6=15120*378/12600, 283.6=15120*236.3/12600, 378=15120*315/12600, 189=15120*157.5/12600, 73.8 is unchanged because it is fixed costs, 1378=453.6+283.6+378+189+73.8, 512=1890-1378.

    24%=378/1575, so 1890*24%=453.6 15%=236.3/1575, so 1890*15%=283.6
    20%=315/1575, so 1890*20%=378 10%=157.5/1575, so 1890*10%=189

    Hope these will help you.
  • Yalda20Yalda20 Posts: 68Registered
    Hi Megan 1,
    Many thanks for your comprehensive explanation it helped me to recall that I had studied these in level 3 and in level 4 FS. I really appreciate your help. Best wishes :)
  • Yalda20Yalda20 Posts: 68Registered
    by the way do you know how they have worked out Asset turnover (non-current assets) in Sample paper 2 Task 5 a? I know the formula is Sales/net assets so $20,000/$6025=3.3 times but the answer is 4.6. Not sure how the have worked this out. Thank you.
  • IrrorateIrrorate Posts: 140Registered

    Asset Turnover (Non-current Assets) is Sales / NC Assets - in this case Sales / PPE.

    In this example:
    Sales = 20,000
    PPE = £4,330

    Hope this helps.
  • Megan1Megan1 Posts: 25Registered
    The formula you said is not correct. The calculation for Non-current asset turnover is just what Irrorate told you. As to Net asset turnover is Revenue / total asset - current liability, so it should be 20000/10928-3703=2.8 times. £6025 is total equity not net asset.

    Hope this helps.
  • Yalda20Yalda20 Posts: 68Registered
    Hi both,
    Many thanks for your response. I couldn't remember the formula so I googled it and that's what I got (Silly Google). I saw this formula in the FS book. Thank you guys and best wishes and good luck for your exams
  • Yalda20Yalda20 Posts: 68Registered
    Hi @Irrorate and @Megan1 -
    I am working through Osborne workbook, synoptic assessment 4 question 5.

    I have to work out the Gearing (debt/equity) ratio.

    I understand that the formula for gearing is:

    Non current liabilities / NCL+ equity*100

    NCL 3,350 and Equity is 4,451.

    The answer in the book is 75.98% but I think I get 42.94%.

    I am not sure if the brackets next to gearing means something else?

    Many thanks in Advance
  • IrrorateIrrorate Posts: 140Registered
    3,350 / (4,451 + 3,350) * 100 = 42.94% which makes me think we're missing a figure.

    Have you got any overdrafts, etc? Technically it's total debt / (equity + total debt).

    Can you post the question?
  • Yalda20Yalda20 Posts: 68Registered
    @Irrorate - thank you so much for your reply.

    I have taken a picture of the question but can't see to find where I can attach it?

    Equities and liabilities: this the heading.

    Equity - all in one line- £4451

    Non-current liabilities- all in one line- £3,350

    Cash and cash equivalents- £32

    Trade payables -£1,613

    Taxation - £104

    There is no over draft or anything else. The above is all given.

    I understand that the formula is total debt but the total debt only means non-current liabilities I believe not current liabilities like taxation and trade payable.

    There are other examples in the book and I have used the same formula and I get the same answer as the book but not for this one.

    Thank you so much.
  • Yalda20Yalda20 Posts: 68Registered
    @marialucas - Hi Hun,

    Can you please look into my above question to see where I am going wrong?

    Many thanks
  • Megan1Megan1 Posts: 25Registered
    75.98%= (3350+32) /4451
    There are different ways to calculate gearing. The brackets told you to use ''debt/equity'' to calculate gearing in this case. debt=NCL+overdraft. In this case assuming overdraft is ''cash and cash equivalents'' (current liability).
  • Megan1Megan1 Posts: 25Registered
    How did you work out osborne workbook, practice synoptic assessment 2, task 4, (1) (a)?

    For Year1's cash flow, why does the answer deduct £60,000? The £60k will be transferred to Lincolnshire site only if Southampton closes. However, we are asked to calculate the net present value of the proposal to continue to operate the site for the next four years.
  • Yalda20Yalda20 Posts: 68Registered
    Hi @Megan1 -

    Thank you for your message about ratios.

    We went through this question in class but cannot recall what my tutor said. I actually didn't think about it until now. Sorry I am not much help. I will email my tutor if she respond I will revert. Hopefully she will get back today.

    I was actually questioning my self why the £50,000 is added it's a cost so it should be deducted? What the logic behind this?

    I will revert as soon as my tutor responds hopefully it's before your exam. Sorry and thank you
  • Megan1Megan1 Posts: 25Registered
    Thank you for your reply.

    The £50,000 is added because the profit of £275,000 is after a management recharge of £50,000. In other word, before the management recharge the profit was £275,000+£50,000=£325,000, which is the actual profit.

    When are you sitting your synoptice exam?

  • Yalda20Yalda20 Posts: 68Registered

    Thank you once again. I will go through the question again in a bit to see if it makes sense. Thank you though.

    I am sitting the exam on Saturday at 11. How about you? I don't feel confident at all most of my clas mates aren't sitting the exam because they feel lost and not ready. I feel the same way as them but I want to sit just for the experience.

    Good luck with yours
  • Yalda20Yalda20 Posts: 68Registered
    @Megan1 - I am continually checking my email for a response from my tutor but nothing yet. I really hope that she does get back today. Thank you
  • Megan1Megan1 Posts: 25Registered
    @Yalda20 Thank you for your kindness. I am not in a hurry as I haven' t booked my exam yet, probably in July. Focus on your revision but please remember to come back when yours is done. Give us your feedback from your experience and your tutor's answer.

    By the way, if you have any more questions which I can help with before Saturday, I will do my best.

    Good luck!
  • Yalda20Yalda20 Posts: 68Registered
    @Megan1 -
    Thank you so much for all your help. I am so happy to see that nice people like yourself sill exist in this world.
    As soon my tutor comes back and once I am done with my exam, will let everyone know about my experience.
    Many thanks x
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