Current updates regarding coronavirus (Covid-19) and the precautions AAT are taking will be continually updated on the below page.

We hope you are all safe and well and if you need us we will be here. 💚

# Budgeting - percentage calculations

Just JoinedRegistered Posts: 37
edited June 2015
This year's budget for raw materials was set at £319,770. This assumed a 2% price increase from the previous year together with a reduction in production volume of 5%. However, production volume remains static and the price increase is 3%.
Calculate the raw material cost forecast..... ??

• Just Joined Registered Posts: 37
edited June 2015
Not sure where I am going wrong... 319770 x 100/102 = 313,500
313,500 x3%= 9405 3+3500 = 322,905. Yet answer is 339,900?
• West YorkshireRegistered Posts: 65
Ok so you do 319770/102*100=313500, 313500/95*100=330000,330000*3/100=9900,330000+9900=339900 #bingo
• Feels At Home Registered Posts: 130
Hi
I think it's the way it is worded.

I agree with the first part of your caclualtion 319770 x 100 / 102 = 313500.
As this figure incorporates a reduction in production of 5% I would do this: 313500 / 95 x 100 = 330000
Now add the 3% price increase: 330000 + 9900 = 339900
Hope this helps
• Just Joined Registered Posts: 37
Thanks for your explanation. that 5% pulled me off track
• West YorkshireRegistered Posts: 65
Wabisabi look at the timing difference between my post and yours
• Feels At Home Registered Posts: 130
A photofinish! Great minds think alike
• West YorkshireRegistered Posts: 65
My man
• Registered Posts: 2
need help fort the different ways to calculate the percentage for example
we have 450 and 10% you will see 450x100/90 another time you will see direct multiplication of 450x10% another time you will see 450x10/90 and so on and so forth and other many ways please I need explanations of when to use each one.
• Feels At Home Registered Posts: 130
Hi Maereg

One way to explain it would be to compare it to a VAT calculation. If you have a price of £24 that includes VAT and you want to calculate the price net of VAT you would divide £24 by 120 (because that price represents 100% + the 20% VAT) then multiply by 100.

If you are given a budget in which is has been assumed there will be an increase of 3%, then you know that the figure has to be divided by 103 and multiplied by 100 to get back to the pre increase cost. Or if the budgeted amount assumed a decrease of 5% you would divide by what you've got (ie 95% of the original amount) and multiply by what you want to get (100%)

On the other hand if you are given a number and just need to calculate a percentage just divide by 100 and multiply by the percent you want to calculate.

(It's the same principal as using index numbers - divide by what you've got and multiply by the amount you want to get.)

This is how I understand it - hope it helps.
• Registered Posts: 2
Thanks