the basics of budgeting

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
can somebody out there help me grasp the basics of budget cause im crapping myself about the exam it's just not entering my brain, if anyone can help me it would be most appreciated.<BR><BR>sebula

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    the basics of budgeting

    I dunno if this helps but presentation is half the way there.<BR><BR>You need a column for the budgeted costs/output (given in exam question) then a column for flexed budget and then one for Actual costs/output. The fourth column should show the variances.<BR><BR>You derive the flexed budget by adjusting it to the actual results, by calculating the fixed and varable costs and applying it to actual output. Once you have done this, the difference between the flexed and the actual budgets line by line will give you your variances.<BR><BR>Basically, learn how to calculate fixed and variable costs quickly and simply. Know how to recognise and calcuate stepped costs. <BR><BR>Once you get used to the method it is very straighforward.<BR><BR>There is often a follow up question asking you to explain the cause of the variances. Look at these line by line, becuase that is where the answer lies.

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