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In part a) of the question I’m confused why are the flexed costs in budget of BEC recalculated based on the actual number of students (eg. Tuition material cost = $720.000/8000 x 7200 – bpp answer) instead of budgeted number of students which is 6900, while budgeted revenue is calculated based on budgeted no. of students (6900)?
The material budgeted costs of 720,000 are based on 8,000 students (told to us in note (4)). So, to flex that we have to use 8,000.
We are not given a total revenue budget, simply student numbers and fees. So the revenue budget is not so much flexed as calculated for the budgeted mix of students.
I don’t know why the question based budgeted costs on 8,000 students and budgeted revenue on 6,900 students.
This very calculation-heavy type of question isn’t so popular with the current examiner.