Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › rolling budget
- This topic has 1 reply, 2 voices, and was last updated 4 days ago by
LMR1006.
- AuthorPosts
- August 27, 2024 at 4:46 pm #710428
this question is not inter related but on the same topic of rolling budget
BPP q203
1.Broad Co produces quarterly rolling budgets and had forecast the costs of material purchases for the next four quarters (quarters 1, 2, 3 and 4). Purchases for quarter 1 were budgeted to be $220,000 and it was anticipated that the cost of materials would rise at a rate of 2% per quarter.
At the end of quarter 1:
Actual material purchases were recorded as $210,000. This was due to a change of material supplier during the quarter.
• A revised estimate for the increase in material purchase costs was made. The rise was now predicted to be only 1% per quarter.
• The budget was updated.
What estimate for total annual material purchases should be recorded in the updated budgetanswer = 861211
y1q2 212100
y1q3 214221
y1q4 216363
y2q1 218527add all up and will get 861211,
BPP q232
2.
sales:
q1 80000
q2 81600
q3 82232
q4 84967actual sales 110000
using a rolling budget, what should the budget for quarter 3 be?
scheme answer = 116699
110000×1.03 = 113300
113300×1.03 = 116699my answer = 120200
110000×1.03 = 113300
113300×1.03 = 116699
116699×1.03 = 120200i just want to make sure if what im understanding is right. The question ” what should the budget for quarter 3 be?” is directly pointing at the quarter 3 sales, but if the question asked “what should be the budget for the third quarter?”. as in relate to the earlier question if the question asked what should be the third quarter figure would be, is the answer going to be y1q3 214221, or y1q4 216363?
August 27, 2024 at 7:59 pm #710436The budget for quarter 3 should be calculated based on the rolling budget approach. The sales figures for each quarter are given as:
Quarter 1: $80,000
Quarter 2: $81,600
Quarter 3: $82,232
Quarter 4: $84,967The actual sales for the period are $110,000. To calculate the budget for quarter 3, we need to apply the growth rate of 3% per quarter. Using the rolling budget approach, the budget for quarter 3 would be:
Quarter 3: $116,699
So, the correct answer is $116,699. - AuthorPosts
- You must be logged in to reply to this topic.