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Hi sir, there was this one illustration:
“A company produces W and S which are fairly standardised products. Following information relates to Period 1.
The standard selling price of W is $50 each and S $100 each. In period 1 there was special promotion on S with a 5% discount being offered. All units produced are sold and no inventory is held.
Production of W was 2,000 units and 500 S are usually produced.
….”These two pieces of info don’t change. What confused me was that for both the Original Budget and Revised Budget of period 1, sales revenue was calculated by 2000*50+500*100 = $150,000.
Why was the promotion of 5% discount not taken into account here? If I budgeted 2000*50+500*100*95% = $147500, would it be wrong?
I do not have the BPP Study Text (only the Revision Kit).
However on what you have typed it would seem that the budgeted and revised revenue should have taken account of the discount (unless, of course, the original budget was prepared before the decision to have the special promotion).
If you are watching our free lectures then you do not really need the Study Text – the lectures are a complete free course and cover everything needed to be able to pass the exam well.
The essential book (however you choose to study) is the Revision Kit because it contains lots of past exam and other exam standard questions for practice, and practice with these questions is vital to passing the exam.
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