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- March 6, 2018 at 6:25 pm #440763
Question no 13 September 2016 F5 paper
The understanding of above question is beyond me.
I can only understand if workings are shown.
I cannot figure what figure was flexed in the question and compared with what.March 6, 2018 at 6:49 pm #440775You have to look at each item separately and decide whether the manager has done well or badly. Changes in the market are outside her control.
Material costs: last year each unit cost 8,000/400 = $20 and they had budgeted on $20 per unit (10,000/500).
Suppliers lower their prices by 5% and so we would expect to spend $19 per unit.
She actually spent 6,500/300 = $21.67 per unit – so poor performance.Selling price last year (and budgeted selling price) was $100 per unit. Prices in the market fell by 10%, so she can only really expect to sell for $90. She actually sold for 28,500/300 = $95 per unit – good performance.
The sales volume last year was 400. The market has fallen by 25%, so we can reasonably only expect to see 25% less than 400, which is 300. She has sold 300 and so performance is OK.
March 7, 2018 at 6:19 am #440862@johnmoffat said:
You have to look at each item separately and decide whether the manager has done well or badly. Changes in the market are outside her control.Material costs: last year each unit cost 8,000/400 = $20 and they had budgeted on $20 per unit (10,000/500).
Suppliers lower their prices by 5% and so we would expect to spend $19 per unit.
She actually spent 6,500/300 = $21.67 per unit – so poor performance.Selling price last year (and budgeted selling price) was $100 per unit. Prices in the market fell by 10%, so she can only really expect to sell for $90. She actually sold for 28,500/300 = $95 per unit – good performance.
The sales volume last year was 400. The market has fallen by 25%, so we can reasonably only expect to see 25% less than 400, which is 300. She has sold 300 and so performance is OK.
Thanks Sir! All Clear
It was such a simple question but the way information was given confused me.March 7, 2018 at 6:59 am #440881You are welcome 🙂
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