Neil Arnott Eeek indeed Paula Rutter ….let’s get started! Good evening everyone!
Like · Reply · 1 · 19 hrs
Natasha Everard
Natasha Everard Anyone have any questions?
Like · Reply · 19 hrs
Natasha Everard
Natasha Everard Neil Arnott From John Fawden My Head’s all of a mush when it comes to arithmetically reconciling Marginal to Absorption costing. Help.
Like · Reply · 19 hrs · Edited
Katie Lowen Bookkeeper
Katie Lowen Bookkeeper Good evening Neil
Like · Reply · 19 hrs
Neil Arnott
Neil Arnott That’s a great question to start with – the only difference between the two is how we treat fixed overheads. In Marginal cost they are treated as a Period cost (think of insurance which is paid by the month) and so they are not included in the costs of the product. In absorption costing ALL costs are classed as costs of the product. This means that they will give different profit figures in periods where there is an increase or decrease in closing inventory (since under marginal costing none of the fixed overheads get carried forward as part of the stock valuation in the next period)
Like · Reply · 19 hrs
John Fawden
John Fawden Yes I’m fine with applying contribution and calculating that before applying it to the Fixed Cost but my brain does a wobbly when it comes to the variable element on Stock differential.
Like · Reply · 19 hrs
Neil Arnott
Neil Arnott Hi John – it depends on what information you are given in the question – it often says that inventory is valued at average cost of production, so you need to work this out first and then use it to split between the cost of goods sold and the closing stock to carry forward
Like · Reply · 19 hrs
John Fawden
John Fawden Cheers Neil Arnott the fog is starting to clear as it appears that the only thing to actually work out rather than straight Transfer is the Variable Costs on the Inventory. Sorry I’m one of those Students who believes anything less than Exceed on a Task is a let down.
Like · Reply · 18 hrs
Neil Arnott
Neil Arnott Always aim high John – I’m a big believer in that. BUT – at Level 4 it gets harder to exceed in all tasks so don’t beat yourself up if you slip occasionally – the important thing is the pass!
Like · Reply · 18 hrs
Natasha Everard
Write a reply…
Neil Arnott
Neil Arnott Hi Katie Lowen Bookkeeper
Like · Reply · 19 hrs
Neil Arnott
Neil Arnott So when you are reconciling profits under MC and Abs Costing what you are doing is looking at how the fixed overheads have been treated – and any difference will be in the value of closing inventory
Like · Reply · 19 hrs
Neil Arnott
Neil Arnott What else does anyone find tricky?
Like · Reply · 19 hrs
Katie Lowen Bookkeeper
Katie Lowen Bookkeeper Performance indicators – esp for the written tasks
Like · Reply · 19 hrs
Neil Arnott
Neil Arnott Written tasks are the biggest problem BY FAR! The final task in 2014-15 had a national pass rate of……..6%. SIX PER CENT!
Like · Reply · 19 hrs
Neil Arnott
Neil Arnott There are a couple of problems – students leave it until last and then run out of time. But the biggest problem by far is students either answering the wrong question or not going into enough depth.
Like · Reply · 19 hrs
Katie Lowen Bookkeeper
Katie Lowen Bookkeeper I’ve booked my exam for Monday. I figure if I can get all other tasks done with a good pass rate I can spend an hour just drilling the two written tasks.
Like · Reply · 19 hrs
Neil Arnott
Neil Arnott Good luck Katie – I’ll post a URL in a second which you MUST have a look at if you haven’t already
Like · Reply · 1 · 18 hrs
Natasha Everard
Write a reply…
Suzanna Rich
Suzanna Rich Will CSTR in Level 3 prepare me for Budgeting?
Is it a more mathematical unit or an analytical one? Or both ? ! 😊
Like · Reply · 19 hrs
Paula Rutter
Paula Rutter snap 😊
Like · Reply · 19 hrs
Neil Arnott
Neil Arnott CSTR is the foundation – if you understand absorption costing and marginal costing, capital investment, limiting factors etc it will stand you in really good stead. It is a bit more mathematical than most – you need to have a good grip of percentages in particular
Like · Reply · 1 · 18 hrs
Natasha Everard
Write a reply…
Paula Rutter
Paula Rutter so when u guys say written tasks on level 4 – do u have to learn scripts to write ?
Like · Reply · 19 hrs
Paula Rutter
Paula Rutter currently loving cost and revenues – is budgeting much of a step up?
Like · Reply · 19 hrs
Neil Arnott
Neil Arnott Paula – every Level 4 has two (at least) tasks which are human marked rather than by the computer – these are often written and test your analytcial or evaluative skills. They’re tricky but there are some strategies to pick up good marks
Like · Reply · 19 hrs
Natasha Everard
Natasha Everard My arch enemy variances first appear here…..any tips?
Like · Reply · 18 hrs
Neil Arnott
Neil Arnott I strongly advise you to read the document on this link:https://www.aat.org.uk/…/L4-Diploma-Accounting-BDGT.pdf
Like · Reply · 1 · 18 hrs
Neil Arnott
Neil Arnott It is the examiner’s comments – and gives really top tips on what to look out for, where the tricky bits are and how to answer the written tasks.
Like · Reply · 1 · 18 hrs
Neil Arnott
Neil Arnott Variances just show the difference between what we thought would happen and what actually did happen. Materials and Labour variances can only be caused by a combination of two things – either the price per kg (or hour) was more or less than we thought, and/or the amount used for the units we actually made was more or less than predicted
Like · Reply · 18 hrs
Suzanna Rich
Suzanna Rich What common mistakes do people when studying Budgeting? And indeed the exam?
Like · Reply · 18 hrs
Suzanna Rich
Suzanna Rich And does the unit change much in the new standards?
Like · Reply · 18 hrs
Neil Arnott
Neil Arnott I think students often take budgeting as the first Level 4 paper – so many struggle with the step up. Many struggle initially with the technical maths involved but they get there eventually – the exam breakdown proves that . The biggest problem by far is the written tasks – accounting students generally don’t like writing so they practice the numbers and hope for the best – VERY DANGEROUS TACTICS!!
Like · Reply · 18 hrs
Neil Arnott
Neil Arnott Suzanna Rich – there’s actually not a huge amount of change between the current and AQ2016 standards. The bigger change comes in Financial Performance
Like · Reply · 18 hrs
Katie Lowen Bookkeeper
Katie Lowen Bookkeeper I’ve taken budgeting first, which subject do you suggest I take next Neil
Like · Reply · 18 hrs
Neil Arnott
Neil Arnott Financial Performance is a natural successor – Budgeting sets the plans and forecasts, FP looks back and asks “Did we meet them and if not, why not?” There is quite a lot of crossover between the two units
Like · Reply · 1 · 18 hrs
John Fawden
John Fawden Sorry to come back Neil Arnott Budgeting is my 1st L4 Module would you therefore suggest I look at Financial Performance and Cash Management Texts when studying Variances.
Like · Reply · 18 hrs
Neil Arnott
Neil Arnott This graph shows just how badly students do on Tasks 5 and 8 – the humanmarked tasks
Neil Arnott’s photo.
Like · Reply · 18 hrs
Natasha Everard
Natasha Everard I aced the technical questions but failed my first attempt due to the written.
Like · Reply · 18 hrs
Neil Arnott
Neil Arnott Many many students do – even if you don’t particularly like written tasks (in fact ESPECIALLY if you don’t like them) – Practice practice practice
Like · Reply · 18 hrs
Natasha Everard
Write a reply…
Neil Arnott
Neil Arnott Hi John – variances only get the ‘light touch’ in Budgeting – you study more of them and in more depth in FP. The danger of looking at the FP text is that you might scare yourself – but if you have the book then by all means have a look but limit yourself at this stage to the ones which are in the budgeting paper. Variances don’t crop up in Cash Mgt (except in the context of a cash budget) so give that one a miss!
Like · Reply · 18 hrs
John Fawden
John Fawden Thanks for the advise
Like · Reply · 18 hrs
Neil Arnott
Neil Arnott You’re welcome
Like · Reply · 18 hrs
Natasha Everard
Write a reply…
Katie Lowen Bookkeeper
Katie Lowen Bookkeeper Natasha, do you get a sheet telling you which tasks you have exceeded, met etc like you do in level 3?
Like · Reply · 18 hrs
Natasha Everard
Natasha Everard Yes x
Like · Reply · 18 hrs
Katie Lowen Bookkeeper
Katie Lowen Bookkeeper On the day of the exam or when the result is published on your AAT page?
Like · Reply · 18 hrs
Natasha Everard
Natasha Everard When they are published on your AAT page
Like · Reply · 1 · 18 hrs
Suzanne Freed
Suzanne Freed Whereabouts? Just looked at mine and on the assessment results page it just says competent. Should I be looking somewhere else?
Like · Reply · 18 hrs
Natasha Everard
Natasha Everard Suzanne Freed yes, ask then centre you booked your assessment with to provide you with your feedback.
Like · Reply · 18 hrs
Suzanne Freed
Suzanne Freed OK thank you
Unlike · Reply · 1 · 18 hrs
Natasha Everard
Write a reply…
Neil Arnott
Neil Arnott Yes you do Katie Lowen Bookkeeper – although results for L4 exams take 5-6 weeks to come through because of the human marked tasks
Like · Reply · 18 hrs
Neil Arnott
Neil Arnott I’d advise practising the written tasks by setting yourself a strict time limit – and remember you’re trying to pick up around 30-40% of the marks for he whole exam in these two tasks – so you need to go into plenty of depth to pick marks up. But don’t waffle – it wastes time and earns nothing. Bullet points are fine (so long as you explain what you mean in them)
Like · Reply · 18 hrs
Katie Lowen Bookkeeper
Katie Lowen Bookkeeper Congrats Sajan – results hot off the press
Like · Reply · 1 · 18 hrs
Sajan Atwal
Sajan Atwal All that hard work paid off!
Like · Reply · 18 hrs
Katie Lowen Bookkeeper
Katie Lowen Bookkeeper What’s next?
Like · Reply · 18 hrs
Sajan Atwal
Sajan Atwal Indirect Tax and then I have to re sit my APCR one which will be booked August and spreadsheets in July and I am going to start level 4 straight afterwards
Like · Reply · 1 · 18 hrs
Natasha Everard
Write a reply…
Jane Hasler
Jane Hasler Just to let you know Natasha has thunder storms in her area so internet is up and down – she’s not ignoring you and will answer when it’s back on x
Like · Reply · 18 hrs
Neil Arnott
Neil Arnott A feeble excuse…she should have budgeted for that!
Unlike · Reply · 3 · 18 hrs
Jane Hasler
Jane Hasler Ha ha Neil good one!
Like · Reply · 18 hrs
Natasha Everard
Natasha Everard Im Back lol
Like · Reply · 1 · 18 hrs
Paula Rutter
Paula Rutter are they any additional books or materials u suggest aside from providers materials for budgeting ?
Like · Reply · 18 hrs
Jane Hasler
Jane Hasler Oh no caught out Neil
Like · Reply · 18 hrs
Katie Lowen Bookkeeper
Katie Lowen Bookkeeper Shhh! Don’t talk about Natasha, she’s back 😉
Like · Reply · 1 · 18 hrs
Neil Arnott
Neil Arnott Shh. Mum’s the word!
Like · Reply · 1 · 18 hrs
John Fawden
John Fawden Yes but where’s Dad in the equation
Like · Reply · 18 hrs
Natasha Everard
Natasha Everard The operating budget always was a tricky question in the live exam. Any tips?
Like · Reply · 18 hrs
Neil Arnott
Neil Arnott All Level 4 subjects benefit from additional reading – and budgeting definitely does. The Osborne/Kaplan/BPP books are written to the AAT syllabus, which is good because they cover what you need, but at level 4 can leave you wanting to stretch your kno…See more
Unlike · Reply · 1 · 18 hrs
Neil Arnott
Neil Arnott He’s sitting here typing away on Facebook John Fawden! Waiting for a nice cup of tea!
Like · Reply · 18 hrs
Neil Arnott
Neil Arnott How was operating budget tricky Natasha???
Like · Reply · 18 hrs
Natasha Everard
Natasha Everard It was one calculation that always threw me lol
Like · Reply · 18 hrs
Neil Arnott
Neil Arnott Can you remember which? Otherwise I’m a bit in the dark…..!
Like · Reply · 18 hrs
Natasha Everard
Natasha Everard Bear with me…just getting my notes lol
Like · Reply · 18 hrs
Katie Lowen Bookkeeper
Katie Lowen Bookkeeper Is that question 3? Where you have to read very carefully how to calculate the closing inventory etc?
Like · Reply · 18 hrs
Natasha Everard
Natasha Everard Thats it lol
Like · Reply · 18 hrs
Rita Lees
Rita Lees Our tutor briefly discussed ratios and im wondering if this is an area i need to learn and understand or do i just need to know their names for written questions? Eg acid ratio
Like · Reply · 18 hrs
Neil Arnott
Neil Arnott Have a look at my comments to John earlier – I know students find this one tricky at first but it is actually the question that MOST students pass in the exam – which suggests that once you’ve nailed it it all fits together
Like · Reply · 18 hrs
Neil Arnott
Neil Arnott Rita Lees these ratios shouldn’t appear in budgeting at all – but they do appear in financial performance
Like · Reply · 1 · 18 hrs
Natasha Everard
Natasha Everard Does anyone have any further questions for Neil on Budgeting this evening? 🙂
Like · Reply · 18 hrs
Neil Arnott
Neil Arnott The other issue students sometimes have is with percentages – you really need to know if you want 5% of something, or if the figure is 5% of a bigger figure. This is especially the case when dealing with wastage etc. Just watch out!
Like · Reply · 1 · 18 hrs
Katie Lowen Bookkeeper
Katie Lowen Bookkeeper No, not from me, thank you Neil
Like · Reply · 18 hrs
Paula Rutter
Paula Rutter can u come back later in the year please for more q&a on everything 😊
Like · Reply · 18 hrs
Neil Arnott
Neil Arnott Everything!!!?????
Like · Reply · 1 · 18 hrs
Paula Rutter
Paula Rutter yep everything
tash is always singing your praises
Like · Reply · 1 · 18 hrs
Natasha Everard
Write a reply…
John Fawden
John Fawden Thanks very Much Neil. Teas off only drink Coffee
Unlike · Reply · 2 · 18 hrs
Neil Arnott
Neil Arnott Katie Lowen Bookkeeper…good luck with your exam then I’m coming to get you for your ISYS!
Unlike · Reply · 1 · 18 hrs
Katie Lowen Bookkeeper
Katie Lowen Bookkeeper I’ve ear-marked another look at ISYS next week Neil. I just can’t get enough of budgeting this week – I’m enjoying it so much 😉
Like · Reply · 18 hrs
Neil Arnott
Neil Arnott Mmmm….do I believe you??
Like · Reply · 18 hrs
Natasha Everard
Write a reply…
Natasha Everard
Natasha Everard If there are no more questions then i would like to thank Neil from his time again this evening answering our questions and good luck to everyone sitting their budgeting exam shortly 🙂
Like · Reply · 2 · 18 hrs
Neil Arnott
Neil Arnott Thank you everyone….remember to get the written tasks sorted…and PLEASE have a look at this linkhttps://www.aat.org.uk/system/files/study_resources/L4-Diploma-Accounting-BDGT.pdf
Unlike · Reply · 2 · 18 hrs
Natasha Everard
Write a comment…