• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • FIA Forums
  • CIMA Forums
  • OBU Forums
  • Qualified Members forum
  • Buy/Sell Books
  • All Forums
  • Latest Topics

BPP Black Friday sale!

40% discount on all BPP books specially for OpenTuition students!
Get it here >>

Material Purchases budget

Forums › CIMA Forums › Material Purchases budget

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by Cath.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • January 18, 2017 at 8:47 am #368098
    jforrest19
    Member
    • Topics: 7
    • Replies: 1
    • ☆

    Hello,

    Hoping you could help me with the working for a P1 pearson mock question..

    A company has a production budget for the next 2 years of 36,000 units per annum to be produced evenly throughout both years.
    Each unit uses 2 kg of material.

    The estimated opening raw material inventory at the start of the next year is 2,000 kg but the company then wants to hold sufficient raw material inventory at the end of each month to cover the following month’s production.

    The budget material cost is $12 per kg.
    What is the material purchases budget for next year ?
    Give your answer to the nearest $000.

    Answer is 888

    However I’m getting 912

    My working was
    Required stock = 36000 units * 2kg = 72000
    + 1 month’s holding stock = 3000 * 2kg = 6000

    Less 2000kg closing stock

    = 76000kg required x £12 = 912000

    Not sure why the mock has 888000

    Many Thanks
    James

    January 20, 2017 at 9:53 pm #368636
    Cath
    Participant
    • Topics: 0
    • Replies: 448
    • ☆☆☆

    Hi, Thanks for your question.

    Im afraid it looks like the Pearson paper has an error in it -CIMA have acknowledged there were errors in the paper initially – but I was under the impression these had been removed.
    I will confirm with CIMA – but your method looks absolutely right.

    If you are getting similar questions in your exam kit correct – then please dont worry about this one – it looks like a detail must\ve been missed out somewhere.

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • Musumalip on Audit tests: the difference between tests of control and substantive tests
  • Javen on Property, plant and equipment (IAS 16) – Revaluation increase – ACCA (SBR) lectures
  • BlakeR on Group SCF – Introduction – ACCA (SBR) lectures
  • John Moffat on The cost of capital – Cost of debt – ACCA Financial Management (FM)
  • John Moffat on FM Chapter 9 Questions – Discounted cash flow – further aspects

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in