{"id":"fpa-euro-budget-spend-rate-split-lines","audience":"fpa","category":"finance-work","track":"finance","technique":"verification","level":"intermediate","title":"Split a euro cost variance into spend and exchange rate effects","free":false,"task":"You're explaining a euro cost variance in US dollars for the finance director. Write a prompt for plain text with lines starting \"Budget:\", \"Actual:\", \"Spend effect:\", \"Rate effect:\" and \"Check:\". Spend effect uses the budget rate on the euro difference. Rate effect uses actual euros times the rate difference. Show the math. The Check line proves the two effects add to the dollar variance. Label each effect favorable or unfavorable. Under 110 words.","materialLabel":"Source material (attached to your prompt automatically)","material":"EU SUBSIDIARY Q4 COST VARIANCE\n\nBudget: EUR 400,000 at the budget rate of $1.10 per euro\nActual spend: EUR 410,000, translated at the average Q4 rate of $1.05 per euro\n\nOther information:\n- The spot rate on Nov 3 is $1.07 per euro; it is not used for this analysis.\n- A weaker euro (fewer dollars per euro) lowers the dollar cost of euro spending.\n- Variance sign convention: cost above budget is unfavorable, cost below budget is favorable.\n\nThe finance director wants to know how much of the dollar variance came from spending more versus from the currency. The EU team says the extra EUR 10,000 was an approved marketing event, but the invoice approval is still pending in the AP system.\n\nNo hedges are in place for the EU subsidiary this quarter. Figures are in whole dollars and euros.","rules":[{"type":"plainText"},{"type":"maxWords","max":110}],"promptHints":[{"label":"Names the five lines","patterns":["budget","actual","spend effect","rate effect","check"]},{"label":"Defines both effects","patterns":["budget rate","actual euros"]},{"label":"Asks for labels","patterns":["favorable","unfavorable"]},{"label":"Excludes spot","patterns":["spot","only"]},{"label":"Caps length","patterns":["\\d+\\s*words","under \\d+"]}],"mistakes":[{"title":"Using the spot rate","why":"The AI translates at $1.07.","fix":"Say: \"Use the budget rate and the average Q4 rate only.\"","checks":["r0","r2"]},{"title":"Wrong rate base","why":"The AI multiplies the rate gap by budget euros.","fix":"Add: \"Rate effect uses actual euros.\"","checks":["r1"]},{"title":"No tie-out","why":"The AI never proves the pieces add up.","fix":"Add: \"A Check line: effects sum to the dollar variance.\"","checks":["r2"]},{"title":"Missing labels","why":"The AI gives signs without saying favorable or unfavorable.","fix":"Add: \"Label each effect favorable or unfavorable.\"","checks":["r1"]},{"title":"Markdown extras","why":"The AI adds bold labels, headings and a closing note.","fix":"Say: \"Plain text, no bold. Output only the lines asked for.\"","checks":["plainText"]},{"title":"Trusting the AI to count words","why":"AI is bad at counting and runs past word limits.","fix":"Ask for fewer words than the real cap and keep each part short.","checks":["maxWords"]}],"hint":"Variance splits need a formula for each piece and a tie-out. Name the rate and the euro base for each.","rubricLabels":["The five lines start Budget:, Actual:, Spend effect:, Rate effect: and Check: in that order; Budget shows EUR 400,000 x $1.10 = $440,000 and Actual shows EUR 410,000 x $1.05 = $430,500","Spend effect shows EUR 10,000 x $1.10 = $11,000 unfavorable and Rate effect shows EUR 410,000 x ($1.05 - $1.10) = -$20,500 favorable","Check shows $11,000 - $20,500 = -$9,500 favorable, equal to $430,500 - $440,000, and the Nov 3 spot rate of $1.07 is not used"]}