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AVTO, Dec 03

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › AVTO, Dec 03

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by John Moffat.
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  • Author
    Posts
  • January 31, 2018 at 2:56 am #434096
    mansoor
    Participant
    • Topics: 423
    • Replies: 541
    • ☆☆☆☆

    Good Morning!

    We are not inflating the given labor/component/sales costs by the inflation of 20% in year 1.

    Is it because the costs given ARE for year 1?
    where as normally we are given the costs at year 0 which requires the figures to be inflated?

    regards

    January 31, 2018 at 10:46 am #434163
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54835
    • ☆☆☆☆☆

    Yes – the costs are given for year 1 and so it is only later years that inflate.

    This is very common in the exam. We only inflate in the first year if the costs are given at current prices.

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