AAT level 4 budgeting assessment 1&2 task 7a

mahadabdullah17

assessment 1:
why is equipment hire "flexed budget" same as the "original budget"?
the aat answer model is 200,000 for equipment hire(flexed budget answer)


assessment 2:
why is labour and factory rent "flexed budget" is the same as the original budget (73000 units)?
also why is there two "original budget" columns with different unit amounts(73000 and 80000 units respectively) - are we supposed to use both or just one column?
the aat answer model is 110,000 for labour and 92,460 for factory rent(flexed budget answer)

Krisso

For Assessment 1 you are told equipment costs are flexed every 19000 if you divide 185000 by 19000 and 175500 by 19000 you will see that they are both 9.73 & 9.21 respectively as you round up on steps the flex is the same so 10 steps for each

Krisso

Again for assessment 2 the devil is in the detail

The question mentions nothing about rent and for the same 2 levels 73000 & 80000 you can see no movement in the figures so the only answer is that it is fixed costs

Labour is indeed £110,000 Again as with assessment 1 count the steps for each and round up to the next whole number for steps. 73000 & 77000 both have 11 steps and 80000 has 12. You could always verify your answer by dividing £120000 by the 12 steps of 80000 and multiplying by the 11 steps of 77000.

The 2 columns are there to show different activity level, dont let it throw you off the procedure for calculating is exactly the same.

mahadabdullah17

Thank you @Krisso really appreciate you helping me