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ACCA F7 Exam Question 2 Dune (June 2010)
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Good evening. Probably a silly question but in case of Dune point 4- goods with cost of $6m have been invoiced to customers at a gross profit of 25% on sales… If we use here PUP calculation, it would be 25/100*6m= $1.5m profit. If I add cost of $6m plus profit of $1.5m, sales come to $7.5m as opposed to $8m. Why is that? Thanks
@gabikar, Because if they are invoiced at a gross profit of 25% on sales, that means that the cost of the goods is 75% of the transfer price ie 75% of the value invoiced to the buying company.
Try it! If your 1.5 was correct, the gross profit would be 1.5/7.5 = only 20%
But if you put 2 as the profit, the pup fraction becomes 2 / 8 = 25%
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Am using BPP F7 study text, could anyone share me anything on consolidation (international), cashflow and Ratios
Can you post your tips for the Dec 2010 F7 exam?? The tips on the main screen are for June 2010. Thanks so much.
found the exam question run through very helpful
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