# Bits and Pieces

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This topic contains 2 replies, has 2 voices, and was last updated by  neilsolaris 2 years, 3 months ago. This post has been viewed 66 times

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Participant

See BPP revision kits number Bits and Pieces

(1) Why if I calculate like that I don’t get the answer for the calculation of incremental revenue????? :

BEFORE INCLUSION OF SUNDAY
number of days before inclusion of sunday = 50 weeks * 6 days = 300 days
Sales revenue= \$10000 * 300 days = \$3000000
Gross Profit= \$3000000 * 70%= \$2100000
Purchases= 3000000 – 2100000 = \$900000

AFTER INCLUSION OF SUNDAY
number of days after inclusion of sunday = 50 weeks * 7 days= 350 days
Sales revenue= (160% * \$10000) * 350 days= \$5600000
Gross Profit= 5600000 * 50%= \$2800000
Purchases= 5600000- 2800000= \$2800000
Discount received= 2500000 * 5%= \$140000

Therefore Incremental benefit :
Increase in gross Profit (2800000- 2100000) = \$ 700000
Discount received = \$140000

Why is it not good???

(2) And also why is the Half-day off not taken into consideration as a relevant benefit as it reduces extra cost????

neilsolaris
Participant

Funnily enough I’m on this question too. I haven’t completed it yet, so I don’t want to look at the answers quite yet. However, when you worked out the incremental revenue for Sundays, I notice that you multiplied it by 350, and therefore calculated all days as being 60% higher than average. I could be wrong but maybe that’s the reason you have a different result for revenue.

I’ll have a look at the rest of the question tomorrow, as I’m a bit sleepy now! I find these kind of questions very tricky.

neilsolaris
Participant

I think I went about this a different way to you, but this is how I tackled it.

Incremental revenue (just revenue for Sunday) = \$10,000*1.6*50 = \$800,000