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delay payments to trainer
how it is calculated ? i read the solution, but they are not showing calculations..There is no profit effect of delaying the payment to trainers – the cost will still be reported in the quarter that the expense occurred.
The reason for the extra trainer costs in quarters 3 and 4 is because of the software upgrade. It says that they will run extra courses and that because there is an extra 20% revenue there will be 20% extra trainer costs.
The answer for (a) said the overall sales growth is 14%
How to calculate the 14%?Sales in the question have grown from 40 in quarter 1 to 60 in quarter 4.
It has grown for 3 quarters (1 to 2; 2 to 3; 3 to 4) and so the average growth per quarter = (cubed root (60/40) ) – 1 = 0.14 = 14%
I am still not clear about the calculation of the delaying payment to trainers.
For exp: $8,000 is the invoice charged in Q1 50% will be delayed so in Q1 should charge $4,000 right? and another $4,000 will be paid in Q3.
so in Q3 the amount should be $14,000
Is it? very confuse @.@Delaying payment will not affect what appears in the profit statement each quarter. You record expenses when they are incurred – not when they are paid. So for the profit statements it makes no difference whether they pay immediately or pay later.
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Why is it that the room hire costs are also delayed until quarter 3?
Room hire costs are not being delayed – what makes you think they are?
The room hire costs in the first two quarters do not change.
In quarters 3 and 4, the question says (under the heading ‘software training’) that there will be 20% more classes and they want to keep room standards the same. So that means they will need 20% more rooms and therefore the room hire cost goes up by 20% in both quarters.sir,
The answer for (a) said the overall sales growth is 14%
How to calculate the 14% and why we use -1 in cube roots?
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