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Hello Sir. I AM NEW HERE and i am having trouble with incremental budeting questions that many students like me find it quite difficult to get the answers for that type of questions.
Could you please tell me what is incremental budgeting with the example.
Also, i did not find any lecture on incremental budgeting. Please upload a lecture on this topic.
Thanks.
Incremental budgeting is already explained in my lectures.
If you are having problems with a specific question (if either a past exam question or a question from the BPP Revision Kit) then ask here and I will explain.
There is a past paper question called [‘Belton Park Resort’ in March/June 2019 paper] in which I’m having a problem with the overall answer. So please explain that to me.
Please tell me in short that incremental budgeting is where the incremental revenue and cost is taken into account because of two factors inflation and other factors that cause changes in the level of activity. right?
I have seen your notes & lectures about incremental budgeting but I couldn’t find any example there that you usually answer in your lectures. If you have such a lecture where you answered a question of incremental, please share that with me.
This question is not incremental budgeting.
The word incremental means extra, and the question is asking what the extra cash flows will be if they keep open the hotel and if they keep open the water park.
This is a relevant costing question, and it means following the instructions given in the question regarding the revenue and each of the notes.
For example, note 1 in the question says that the hotel permanent staff are paid for the full year regardless of their working hours, so there is no extra cost of staying open in January.
The temporary staff are therefore currently paid 120,000 – 54,000/12 = $115,500 per month. The note says that half of them will continue to work their current hours, so staying open will mean paying them 1/2 x 115,500 = $57,750. The other half will earn less because the occupancy will be 50% instead of 90%, so they will be paid 50/90 x 57,750 = $32,083You cannot learn anything for this type of question because it is following the instructions in the question, and every question is different. The problem is following the wording when you are under time pressure in the exam. The arithmetic itself is not difficult at all.
There is no point in me typing out the entire answer because you have the answer in your Revision Kit. However if you are unclear about any of the other figures in the answer then ask and I will explain.
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