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June 15 Merkland Sportswear

This topic has 1 reply, 2 voices, and was last updated 6 years ago by Ken Garrett.

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July 11, 2019 at 2:48 am #522459
zkaay
Participant
- Topics: 212
- Replies: 98
Hi sir,
Part ii
The answer is
Extra units needed to cover that loss = 5.5/5199 = 105,973
1) What is the formula used here (which item divide by which item.)
2) how to arrive to 5199 figure
Thank u so much
July 11, 2019 at 11:03 am #522575
Ken Garrett
Keymaster
- Topics: 10
- Replies: 10597
New contribution = 75 – 21 x 1.1 = 51.9
The loss of operating profit (in answer workings) 5,500,000. This has to be recouped by selling more units, each making 51.9 contribution.
Extra volume needed is therefore: 5,500,000/ 51.9 = 105,973.
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