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# Budgeting Exam in 2weeks

emma8021
Registered Posts:

**36**
I have my budgeting exam in 2weeks and feeling quite nervous about it. Currently doing the AAT Sample test 2 and struggling with the calculations on 5 b and 6 b & c . Would be grateful if anyone could help with these ? Many Thanks.

0

## Comments

55Right, on 5B the sales revenue is pretty straight forward. The sales revenue for the year is £1575000 and units sold was 315000, so that's £5 per unit. In June, they sold 27000 units, so multiply by £5 = £135000.

Materials used - This is where you need to look at the Units produced. In the year the total is £855900 / 317000 = £2.70 per unit is the variable cost. Multiply this by 26500 produced in June = £71550, do this for the remaining costs (apart from Fixed as this is a yearly total evenly allocated over each month).

6B - You need to work out the standard cost, basically what it should cost! So 5000 items should be 35 mins per unit and £12 per hour. So the cost should be £35000 (5000 x 35 / 60) x £12 = £35000.

Actual labour rate is the actual costs (£31250) divide by the hours worked (2500) = £12.50.

Actual minutes per item, hours worked against items made (2500 hours / 5000 units) = 30 mins

Rate Variance = we paid 50p an hour more than budgeted, over 2500 hours equals £1250 adverse variance.

Efficiency Variance = so we are 5 mins quicker per item than budgeted, 5 mins x 5000 units / 60 = 416.6666 x £12 an hour = £5000 favourable.

Cost varaince is the actual versus the flexed which is /33750 favourable, you can double check by checking your workings e.g £5000 fav minus £1250 adverse = £3750 favourable.

6C = Have a go yourself, you will be fine

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