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Budgeting

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Budgeting

  • This topic has 6 replies, 2 voices, and was last updated 1 month ago by John Moffat.
Viewing 7 posts - 1 through 7 (of 7 total)
  • Author
    Posts
  • April 20, 2025 at 11:38 am #716855
    terab
    Participant
    • Topics: 11
    • Replies: 8
    • ☆

    Hello sir,

    This question is based on the lecture notes (chapter 26 example 1) where we have to prepare a flexed budget.

    In the question, it is mentioned that there is no opening inventory.

    If there is an opening inventory, will it be correct if I added the opening inventory+ this month’s production and then calculate the materials, labour and both the overheads?

    For now, the question says

    Production: 8700
    Materials (4kg at 4.50): $ 18

    Say there is an opening inventory of 200

    So in my fixed budget, to calculate materials used, it’ll be 8900*18 and not 8700*18? Thank you so much sir and I apologise for the long question.

    April 21, 2025 at 7:32 am #716865
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54675
    • ☆☆☆☆☆

    No. Given that the question says that they produced 8,700 the cost of the labour and overheads to produce will be based on 8,700.

    April 21, 2025 at 2:59 pm #716876
    terab
    Participant
    • Topics: 11
    • Replies: 8
    • ☆

    Thank you, sir. Does this mean that having an open inventory will make no difference to the fixed and flexed budget?

    April 21, 2025 at 5:29 pm #716880
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54675
    • ☆☆☆☆☆

    Not in the situation that you describe.

    April 23, 2025 at 1:35 am #716901
    terab
    Participant
    • Topics: 11
    • Replies: 8
    • ☆

    Thank you so much sir ?

    April 23, 2025 at 1:46 am #716902
    terab
    Participant
    • Topics: 11
    • Replies: 8
    • ☆

    Thank you so much sir 🙂

    April 23, 2025 at 2:07 pm #716911
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54675
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 7 posts - 1 through 7 (of 7 total)
  • The topic ‘Budgeting’ is closed to new replies.

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