MAC Unit 33 - Confused

Tube
Tube Feels At HomeRegistered Posts: 27
Hi there,

I am studying with BPP and am confused about the way the different budgets are worked out.

For example, in the course materials the production budget is worked out using the following method:

Sales qty
+ Closing stock
- Opening stock
= Total production budget

However in the BPP Course Companion it shows:

Sales qty
- Opening stock
+ Closing Stock
= Total production budget.

Would someone be able to tell me the correct method to use?

Thanks

Comments

  • Tube
    Tube Feels At Home Registered Posts: 27
    MAC Unit 33 - June 08

    Hi,

    Just worked out my own query above. Both methods work out to the same number of total production.

    I've just had a look at the June 08 paper task 1.1 (a). How come the monthly enquiries are 207000 for June? I work it out to be 213000.
    Enquiries 210000
    - Opening enquiries 27000
    + Closing enquiries 30000
    Monthly enquiries 213000

    I think its worked out as, but why?:

    Enquiries 210000
    + Opening enquiries 27000
    - Closing enquiries 30000
    Monthly enquiries 207000

    Can someone help me? :confused1:

    Thanks
  • Londina
    Londina Experienced Mentor MAAT, AAT Licensed Accountant Posts: 814
    Tube wrote: »

    Sales qty
    + Closing stock
    - Opening stock
    = Total production budget

    my book too shows this way!
  • wolfe
    wolfe Well-Known Registered Posts: 121
    tube

    usually when we make production budgets its for a manufacturing organisation. and we minus the opening stock from the sales quantity because we already have it we dont have to produce it while the closing stock is added to the sales quantity as it needs to be produced.

    in this case there isnt any physical output. what we have here is no. of enquiries.

    so in a particular month we will have opening enquiries which have to be carried out in that month because thy havent been carried out the previous month . also there will be clsoing enquiries which need to be carried out NEXT month.

    so the opening enquiries are added to the forecast enquiries because the opening enquiried need to be carried out as they werent carried out last month. the closing enquiries are those which will be carried forward to the next month in other words which do not have to be carried out this month so they are minused from the forecast enquiries.
  • Tube
    Tube Feels At Home Registered Posts: 27
    Thanks for the explanation Wolfe. I have also read the Chief Assessors report and can understand it to some extend.

    I think that the data provided in Section 1 of the exam paper is a little mis-leading as it says that 'the unit of output of a service industry can be viewed in the same way as the product of a manufacturer'. I interpreted this as the both industies being worked out the same way, I guess I was wrong and would have definitely got is wrong if I got this type of question in the exam.

    I have looked throught the BPP books and study folder and cannot find anything relating to the service industry.
  • Londina
    Londina Experienced Mentor MAAT, AAT Licensed Accountant Posts: 814
    Tube wrote: »
    Hi,

    Just worked out my own query above. Both methods work out to the same number of total production.

    I've just had a look at the June 08 paper task 1.1 (a).

    Thanks

    just done that task....endless!!
    I noticed however the solution for 1.3 has two answers, one ignoring the closing/opening enquires, so if I don't include it, my answer is correct anyway? how come?:confused1:
  • Tube
    Tube Feels At Home Registered Posts: 27
    Not sure about this. If you don't include the closing and opening stocks, the total number of enquiries would be less and subsequent answers would be wrong......wouldn't they?.....:001_unsure:
  • Londina
    Londina Experienced Mentor MAAT, AAT Licensed Accountant Posts: 814
    apparently both ways are correct!!

    Task 1.3
    The task was silent on how to treat the opening and closing number of enquiries and therefore credit was given whether these were used or ignored.



    Why they do that, the exams is already difficult, don't need to make assumption too! I thought I made a mistake, waisted time to cancel everything and re-done it like the question, after to find out my previous answer was correct anyway!
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