Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › BPP ACCA Revision Kit pg 32 no 103
- This topic has 5 replies, 2 voices, and was last updated 3 years ago by
John Moffat.
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- October 29, 2020 at 7:19 pm #593472
In this question could not understand from where it got the 0.48 contribution
October 30, 2020 at 9:07 am #593502If the variable cost is 52% of sales then the contribution must be 48% of the sales.
October 31, 2020 at 8:57 am #593614ok understood however in the answer it says that:
Sales rev of $1.5m total contr 45% x 1.5m = $675,000
it leaves a further $625,000 of fixed cost to cover. To achieve breakeven sales in excess of 1.5m need to be $625,000 / 0.48 = $1.302So does this means that the question is asking the breakeven sales in excess ? as I could not understand what its after
October 31, 2020 at 11:16 am #593645The question asks for the total sales revenue in order to breakeven.
Revenue of $1.5 millions will result in a contribution of $675,000.
The need a contribution of $1.3 million to break even so they need an extra $625,000 which means they need extra revenue (on top of the $1.5 million) of $1.302 million.
So the total revenue needed is $2.802 million
October 31, 2020 at 3:48 pm #593670ok thanks
November 1, 2020 at 8:36 am #593709You are welcome 🙂
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