Materials for Cash Flow Forecast

mccabet14
mccabet14 Registered Posts: 1
in Management Accounting: Budgeting
Struggling to understand how to calculate Materials from an operating statement to a cash flow forecast.

£1636880 is the materials calculated in the operating statement.

Stated in the notes that materials payable will decrease by £46,500.
I know the answer is £1710500 from the mark scheme however I just need to know the workings behind this for future reference.

If you could get back to me I would be very grateful.

P.S This question is in sample assessment 2 in the aat level 4 study materials

Thanks,

TMC.

Comments

  • Diabethic
    Diabethic Registered Posts: 1
    You obviously worked this out as this post was a while ago but I couldn't find the answer on here either when I looked.
    Thought I would leave the answer here for anyone else that looks it up.

    You do not use the figure from the operating budget
    You use the purchases figure from the first part of the question when you worked out the materials figures.

    You will probably find the figure in the materials calculations for purchases as £1,664,000 in your example

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