Units 8 & 9 Chapter 4 Help!

Options
mi|kshake
mi|kshake Registered Posts: 70 Regular contributor ⭐
in AAT Level 4 (Level 8 in Scotland)
Hi,

Been stuck on this for a couple of days and am hoping someone can help! I'm sure it's fairly obvious but I can't see it!

Activity 4 asks you to calculate the forecast sales turnover using absolute seasonal variations, which looking at the example seems fairly easy to understand. Just work out the percentage and the ad to the sales right?

So here's what I've put for the first quarter:

Absolute Forecast % Forecast %
Qtr Season Trend Variance (absolute)Variance

17 A 2680000 350000 3030000 115 3082500

The actual answer for the forecast % is £3082000. I have also tried using the same method for the remaining quarters but am way out. Here is how I calculated the 3082500:

=3030000+(350000/100*15)

Any help greatly appreciated!

mi|kshake~

Comments

  • definite.studies
    definite.studies Registered Posts: 88 Regular contributor ⭐
    Options
    Hi, we are using the Osborne book, but I did spot something about the figures.

    2,680,000 x (115 / 100) = 3,082,000

    This leads me to believe that the first figure is the trend to which you add 15 % to get the forecast for the quarter.

    I don't know what the other figures are - could they be the actual variation and actual sales figures?

    I would call this a "percentage seasonal variation" not an "absolute seasonal variation", so I am not sure why your activity is worded in the way you report it.

    Hope this helps!
  • SandyHood
    SandyHood Registered, Moderator Posts: 2,034 mod
    Options
    mi|kshake
    I have put the data into a spreadsheet (and found I can only upload word documents) so that is attached to this reply.

    The 115 value appears to be a seasonal index, which definive.studies would quite rightly call a "percentage seasonal variation".

    This means you have a single trend value of 2,680,000 and two different forecasts values depending on the way you adjust for the seasonality.

    In your initial posting you said
    Activity 4 asks you to calculate the forecast sales turnover using absolute seasonal variations
    On that basis (and assuming I have got my column headings in the right place) the forecast sales turnover for quarter 17 is £3,030,000.

    Incidentally, I divided the £3,082,500 forecast value (which would be multiplicative answer) by the £2,680,000 trend value and found that it is not exactly 15% higher than the trend, so the 115 index number is probably a rounded off amount. See the attached file for the unrounded index value.

    As forecasting is inevitably imprecise, I would find a value of £3,082,500 no more useful than £3,082,000 in a practical sense so please do not be dragged into the numbers so much that you overlook the reason why we produce them.
    Sandy
    sandy@sandyhood.com
    www.sandyhood.com
  • mi|kshake
    mi|kshake Registered Posts: 70 Regular contributor ⭐
    Options
    Thanks for your help guys! I get it now! Dunno why I didn't try that before - not so hard to figure out when I think about it!

    mi|kshake~

Categories

Privacy Policy