help with Management Accounting Budgeting (MABU) practice assessment 1 (from 27 March 2020) paper

Wiggles

I'm taking my synoptic soon and I have been working through the above paper. There are a couple of questions which I need a little help with. I hope someone can help me,

- Task 2, can anybody please explain how to calculate the 'rejected production' values within the production forecast table? This really has me stumped.
- Task 5, in the revenue budget and production cost budget table, can anyone explain how to calculate 'variable production overhead' and 'fixed production overhead'? Thank you for your help in advance.......

Krisso

Task 2
Work out the closing inventory for each week first then you can fill the opening inventory in. Production will be Sale Volume + Closing Inv - Opening Inv (Week 1) = 68,700 The question then tells you that 8% of all production is rejected so to work out rejected you divide 68,700 by 92 x 8 (92 + 8 equals 100% in total) This will then give you the rejected figure that you must round up if a decimal is shown. You can qualify this calcualtion by dividing the 68700 by 92 and times by 100 and it should also (rounded) up equal the total of goods production + rejected production.

Task 5
variable production overhead - As it says on the tin its variable so you know the unit cost take total costs of £95,940 / total units producted 246,000 x April Units Produced 21,000 = £8,190

fixed production overhead - Again as it says on the tin, you are working out 1 month in the year so take the total fixed production overhead £96,000 and divide by 12 = £8,000

Hope this helps

Wiggles

Thank you ever so much Krisso, that has been a huge help x