[James]

Hi John,

Thanks for you answers, I approached Q1 slightly differently with regards to variable costs. I assumed the increase was a forecast change in price or that period so from Y1 to Y2 the increase was 25 and not subject to inflation for that period. I then used this as a base for the next period in inflated this total. So essentially I was only inflating last years amount.

For year 2 calculation was ((472.50 * 1.05) + 25 year increase = 521.13 variable per unit; this was my base for inflating the next years prices.

Is this totally wrong? My view is its down to interpretation of the forecasts. I also wrote a note of my assumption.

How many marks would I lose do to this different calculation method?

Your thought would be greatly appreciated.

[Author]

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