Accounting: Double-penalised Production Budgeting

jc2008

OK, I was doing a practice production budgeting question today

However, I copied a figure down wrong for closing stock in the question, which caused my RM Usage Budget to be wrong, which caused my RM Purchases Budget to be wrong, which caused my Direct Labour Budget to be wrong, which caused my Variable O/Hs to be wrong, which lead on to my Production Cost being wrong, which of course resulted in my Gross Profit being wrong

Do I really lose all the marks for these? There are marks going for the correct figures in the marking scheme but I lost a whole bunch of them just because a transferral error!

My accounting teacher said they don't give you marks for totals etc as they try not to double-penalise you, but in this question I was nearer to be quintuple-penalised rather than double!

What happens in the real LC if this happens? Thanks

QueenOfLeon

I think you can only be penalised once, for the 1st mistake in taking down the figure wrong. After that, even if you have the wrong figure in the RM purchases budget, if you got the figure from the right place to put into the RM purchases budget i.e. you took it from the right place in the usage budget, even if the figure is wrong, you showed you knew what to do and used the right technique so you cant be penalised for a previous mistake.

The marks in the marking scheme, if going for a figure that already has been worked out in some way, is just for knowing where to get it from, or where to transfer it from.

Hope that makes sense, if you want me to explain that clearer ill try!

EDIT: forgot to say, im not 100% sure, but this is what our teacher has always emphasised, so that we dont panic if something doesnt balance due to 1 wrong figure.

DmanDmythDledge

Yeah that is right. You will get the marks from transferring your own figure, not the correct one. So you will only be penalised for your first mistake, and possibly not get the marks for the final figure.

jc2008

Thank you very much! It makes sense to me now. I'm relieved that I didn't drop from 100% to a C because of the one mistake. Thank you! Now hopefully something like that doesn't happen in the exams

Prowetod

Didn't this question come up in the 2008 paper, I hope it doesn't come up this year.

jc2008

Yes it did I think. However I'm a 5th year student concerned with the summer exams and I know they are definitely coming up.

It probably won't come up in the LC this year, instead it will be Cash or Flexible. Hope for flexible, it's much easier than cash!