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BPP practice and revision kit – Cardio Co

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › BPP practice and revision kit – Cardio Co

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by LMR1006.
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  • Author
    Posts
  • November 25, 2023 at 1:08 am #695439
    jessicarawlinson
    Participant
    • Topics: 8
    • Replies: 2
    • ☆

    Hello sir,

    I am struggling with one of the questions for cardio Co;
    Cardio Co manufactures three types of fitness equipment: treadmills (T), cross trainers (C) and rowing machines (R). The budgeted sales prices and volumes for the next year are as follows:
    T C R
    Selling price $1,600 $1,800 $1,400
    Units 420 400 380
    The standard cost card for each product is shown below.
    T C R
    $ $ $
    Material 430 500 360
    Labour 220 240 190
    Variable overheads 110 120 95
    Labour costs are 60% fixed and 40% variable. General fixed overheads excluding any fixed labour costs are expected to be $55,000 for the next year.

    Required:
    (a) Calculate the weighted average contribution to sales ratio for Cardio Co. (4 marks)

    I put the answer as 0.6091, as I thought this is how weighted C/S ratios are usually presented but the answer was as a % I.e 60.92%. Can you please advise why it is a % and not as a decimal.

    Thank you in advance.

    November 25, 2023 at 9:05 am #695453
    LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1504
    • ☆☆☆☆☆

    The weighted average C/S ratio can be 0.609 or 60.9%
    Both are correct

  • Author
    Posts
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