LSBF – Dec 2018 Mock – Rolling budget question

I absolutely can not get the clue from the model answer….

Q2 (Sec B):
Rolling Co is a company selling consumer goods. They have historically used a fixed annual budgeting process. The company operates in a volatile market where it is very difficult to give accurate estimates of sales volumes or costs. The new finance director has proposed the introduction of rolling budgeting to ensure that the targets set in budgets are more realistic. The original fixed budget for the year ended 31 July 20X8, for which the first quarter (Q1) has just ended, is shown below:

Q1 Q2 Q3 Q4
Revenue 25,463 26,227 27,014 27,824
CoS -11,111 -11,444 -11,788 -12,141
GP 14,352 14,783 15,226 15,683
Distribution -1,782.4 -1,835.9 -1,891 -1,947.7
Admin -2,475 -2,475 -2,475 -2,475
Net Pr 10,095 10,472 10,860 11,260

The budget was based on the following assumptions:
Sales volumes would grow by a fixed compound percentage each quarter.
Gross profit margin will remain stable each quarter.
Distributions would remain a fixed percentage of revenue each quarter.
Administration costs would be fixed each quarter.
The actual results for the first quarter (Q1) have just been produced and are as follows:

Revenue 27,500
CoS -11,250
GP 16,250
Distrib -1,925
Admin -2,505
Profit 11,820

Q1. What is the compound rate of growth of sales and what percentage is distribution cost of sales?
Growth rate of sales is ___%
Distribution cost is ___% of sales

Q2. If Rolling Co implements rolling budgeting what would be the gross profit figure in quarter 3?

Q3. If Rolling Co implements rolling budgeting what would be the net profit figure in quarter 4?

LSBF answers:

Q1: Growth rate of sales is 3%.
Distribution cost is 7% of sales.

Q2: GP = 16 907 (= 16 250 * 1.02 * 1.02)

Q3: 13 280 (= 16 250 * 1.02^3 – 27,500 * 1.02^3*5%-2,505)

I absolutely do not understand how they got 2% for sales growth in Q2 and 5% for distribution costs, if in Q1 it is 3% and 7% (derived from initial budget)