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Hi ken
i am confused with the requirement.
why budget calculations in both are different.
in drink group question they said calculate the rolling budget which i understand as mentioned in the requirement and its way too simple.
Is the budget calculation in framilton for luxury is incremental one?
if later is incremental how can we justify that incremental budgeting is simple as compared to rolling?
Is this from SD16? Talks about Framiltone, but not food and drink.
We are at the end of Q1 so the budget for the year would now be Q1 actuals plus forecasts for the remaining quarters.
Requirement b implies tha the presented budget is a traditional incremental budget and you are to evaluate whether moving from incremental to rolling. Evaluate usually means identifying both good and bad consequences.
yup Sir its from SD 16. But my question is difference in calculation of both. i interpret that in both questions they are calculating rolling budget(may be i am missing on something).
in food and drink they just multiply actual result with 1.03 for each quarter and ignore the figures given. but why we cannot do same for sales growth in framilton? in framilton we increase each quarter figure from 2 to 4 with 2 percent instead for multiplying actual result with 1.02.
The original ACCA question downloaded from the ACCA site talks about dairy and luxury products, not food and drink. Also w% seems to be the quarterly increase, not 3%. Only one new budget needs to be calculated.
I assume you are using a question based on the original but amended by a publisher so it is difficult for me to understand your queries. I suggest you use the original ACCA Q and A instead.
in BPP revision kit Drink group is a separate question 5 which calculates rolling budget.
another calculation of budget is in framilton.
why both rolling budget calculations account for increase differently?
in Drink group its a simple multiplier to actual results ie 1.02
but
in framilton 1.03 is applied to each quarter given figure and not based on actual figure.
sorry to make it little confusing before.
I’m sorry, but I don’t have the BPP book so can’t help much. However, BPP has taken an ACCA question and changed it for some reason – perhaps to make it worth more marks. However, when tutors change questions their edits would not usually have the same editorial checks that ACCA caries out on their real exams. Therefore, requirements might be ambiguously worded, or changed figures might not be carried through. Of course, the new question might be fine but you have misunderstood. I can’t tell.
However, I recommend that you ignore this, possibly flawed, version of the question and do not worry about it, and simply use the ACCA’s original version.
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