Task 2 2016 aat practise paper rejected production

adammspells
adammspells Registered Posts: 2
in Management Accounting: Budgeting
Good afternoon,

I'm having some difficulties getting my head around the rejected production part on task 2a budgeting.

If the opening inventory is 20000
Good production 68700
Sales volume 68000
Closing inventory 20700
What would be the rejected production? If 8% of all production fails quality control checks and is rejected

I can fill in the rest of the table except this bit.

Regards

Adamm

Comments

  • steady88
    steady88 Registered Posts: 25
    The goods production 68700 represents 92% of all production, therefore to find 8% of failed production, the way I work it out, (68700/92)x8= 5974. And you can add these together to tell you the total manufactured units, which will be 74674

    You can always double check that 74674 is 100% of units produced, as 92% of 74674 is 68700.

    Hope this helps

  • adammspells
    adammspells Registered Posts: 2
    Steady88 thank you so much... explained it perfectly and saved me so much time :)

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