Osborne BooksSupplement

Management Accounting:Budgeting Tutorial

Updates Summer 2017(to incorporate AAT’sSpecification Updates)

I N TRODUCT ION

In April 2017 AAT released revised specifications for the AQ2016qualifications. These included additional topics that were not included in theoriginal specifications. These topics have now been included in the 2017reprints of the Osborne Books AAT texts. Students with a copy ofManagement Accounting: Budgeting Tutorial printed in 2016 should read theadditional material below in conjunction with the book to ensure that they arefully prepared for their assessment.

C H A P T E R 3

A brief reference to ‘core costs’ as a description of non-operational overheads(for example administration, marketing and finance costs) has been insertedin the section on main types of budget.

C H A P T E R 5

A brief reference to the link between shortage of factory space and limitedproduction capacity has been inserted in the section on constraints.

C H A P T E R 6

An additional activity has been incorporated to provide practice incalculating underlying budget or actual data from variances, as follows onpages 3 and 4:

2 m a n a g e m e n t a c c o u n t i n g : b u d g e t i n g

u p d a t e s s u mm e r 2 0 1 7 3

1 The following table has been partly completed to show some of the flexed budget, the actualamounts and the variances.

Flexed Budget Actual Variance £ £ £ (F/A) Sales revenue 945,280 32,680 A Costs: Materials 131,550 7,065 F Labour 176,230 12,685 A Distribution 55,495 1,070 A Energy 55,895 3,685 A Equipment hire 18,400 1,755 F Depreciation 155,250 1,000 F Marketing 99,950 2,350 A Administration 85,600 4,095 A Total costs Operating profit (loss)

Required:Complete the table to show all the relevant amounts.

Additional Activity

4 m a n a g e m e n t a c c o u n t i n g : b u d g e t i n g

2 Flexed Budget Actual Variance £ £ £ (F/A) Sales revenue 977,960 945,280 32,680 A Costs: Materials 131,550 124,485 7,065 F Labour 163,545 176,230 12,685 A Distribution 54,425 55,495 1,070 A Energy 55,895 59,580 3,685 A Equipment hire 20,155 18,400 1,755 F Depreciation 156,250 155,250 1,000 F Marketing 99,950 102,300 2,350 A Administration 85,600 89,695 4,095 A Total costs 767,370 781,435 14,065 A

Operating profit (loss) 210,590 163,845 46,745 A

Additional Activity Answer