NEW Resit

Question 1

when writing about variances

Answer 1

Give an intro..
This operating statement has been prepared using a budget flexed to the actual volume. … This is an Increase/Decrease on the Original budget.
The Operating profit was Higher/Lower than shown on the flexed & the following commentary will suggest possible reasons for each of the variances that analyse this deff.

Extras to remember -

Remember to look at and probably mention if price per unit has gone down this may be reason for volume being up..

Say whether the standard needs changed (eg. new machine less waste) or the variance needs incorporated in future budgets.. (eg NCAs life has been extended so dep’n will be less from now on)

Maybe a summary saying the MAIN factors that caused the profit variance.

Question 2

Osborne W?B P3 T3

Cash flow forecast from operating statement…
‘Increase in Non-cash provisions’ in relation to ‘other overheads’

Answer 2

This non-cash provisions account worked like a ‘payables’ account … so an increase to it meant we must have paid out less cash for the other overheads than were on the operating statement.

Question 3

Time series seasonal variations

what is the ‘equation’

Answer 3

Actual data = Trend + Seasonal variation

A = T + S

Change this around depending on what 2 figures you have.