# Exams experience &amp; calculation questions

Feels At HomeRegistered Posts: 42
Hi guys.

I self-studied AAT in mid August and booked all my level 2 & 3 exams (except 2 software modules) for October and November. Exams were booked based on what was available at the time, so I basically took 2 exams each week, mixing level 2 & 3 exams together.

In line with the recent change in AAT assessments and the publication of new edition of books such as Osborne books, I studied using the old books and still managed to pass all my exams to date. So I may be able to advise on some possible sections of each exam which they lay strong emphasis on.

All I've left to take is 'Cash management' & 'Indirect tax' which will take place next Wednesday morning and afternoon, then I'll book the software exam for December and then take my level 4 exams in January & Feb :laugh: Then AAT done, and hopefully enough time to book for ACCA exams in-take in June. :laugh:

My advise for those who is going to take AP1 & AP2, manage your time very carefully, if you find a question which you find hard to understand, flag it and come back to it later, and attempt to do other questions, as one question could take up to 20min. I found AP2 very easy compared to AP1, on the feedback sheet, I managed to exceed all sections. Even though I didn't need to stop and think about how to answer the question, it still ate up a lot of time on each section...so time management is important!!!!! (Asset register sheet & accrual and prepayments, asset disposal)

My question is:

How do I flex down a budget in relation to the actual figures?
I know how to flex up a budget.

For example:

Budget Actual
21000 18888 (Production)
13333 11111 (cost)

Do I find the difference between the two production figures and then divide it over the budget production figure and then multiply it by 100 to find the percentage difference? Or do I divide it over the actual production figure then multiply it by 100?

• Font Of All Knowledge Registered, Moderator Posts: 2,034
When you flex a budget to the actual level of production you need to look at the cost behaviour.

Variable costs work the way you expect. Divide the total variable cost by the budgeted production and then multiply by the actual production. Fixed costs are not dependent on the units produced, but watch out for stepped costs at specific levels of output.
Sandy
[email protected]
www.sandyhood.com
• Feels At Home Registered Posts: 42
When you say variable cost, do you mean the difference between the two production level? In the book, it showed the method I mentioned for flexing up.

Also shouldn't I be multiplying it by 100 to find a percentage figure, rather than against the actual production figure?
SandyHood wrote: »
When you flex a budget to the actual level of production you need to look at the cost behaviour.

Variable costs work the way you expect. Divide the total variable cost by the budgeted production and then multiply by the actual production. Fixed costs are not dependent on the units produced, but watch out for stepped costs at specific levels of output.
• Font Of All Knowledge Registered, Moderator Posts: 2,034
TyJac

You clearly have a successful approach which is enabling you to pass a lot of exams.
I assumed that your question was in relation to costs and revenues at level 3. If I'm wrong please accept my apologies.
When you do study costs and revenues at level 3, variable costs is a key term.
Sandy
[email protected]
www.sandyhood.com
• Feels At Home Registered Posts: 42
Yes the question is in relation to the Cost & Revenues exam. Even though I managed to exceeded on all questions, except for one, the flexing down question that I needed to answer gave me some funny looking answers, so I doubted on my method of calculations, but it turned out to be correct, from my feedback. Yet still, I wanted the method to be clarified.
• Trusted Regular Registered Posts: 283
you will not pass level 4 that quickly,you have a 4000 word project to do which most of us find very challenging
• Font Of All Knowledge Registered, Moderator Posts: 2,034
It is up to you TyJac

I suggest that you learn what is meant by cost behaviour
I am not familiar with the approach you described

I think if you take a cost behaviour approach you can get the answer right every time
SandyHood
When you flex a budget to the actual level of production you need to look at the cost behaviour.

Variable costs work the way you expect. Divide the total variable cost by the budgeted production and then multiply by the actual production. Fixed costs are not dependent on the units produced, but watch out for stepped costs at specific levels of output.

This will be tested in the CBE in task 2.4 - but make sure you read the question. Some exams ask you to use a flexed budget but others ask you to use a fixed budget.
Sandy
[email protected]
www.sandyhood.com