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21 Sniff Limited (12/07, amended) 36 mins Sniff Limited manufactures and sells i

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › 21 Sniff Limited (12/07, amended) 36 mins Sniff Limited manufactures and sells i

  • This topic has 1 reply, 2 voices, and was last updated 2 years ago by John Moffat.
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  • August 28, 2022 at 7:39 am #664492
    Iqra-nasir
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    I had a question regarding part C

    which says to calculate selling price per 100 ml for the female version of the product that would ensure further processing would breakeven in the test month.

    In this they have incuded the incremnetal costs of further processing female perfume and the revenue which was earned from the standard version of female perfume.
    Can you kindly explain me why the standard revenue was taken into consideration ?

    August 28, 2022 at 8:53 am #664500
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54701
    • ☆☆☆☆☆

    If they do further processing then there are more costs incurred. So they have to charge a higher price for the product than they would be charging if they were not doing the extra processing.

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