• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA Books

Books for Sept'23 ACCA exams : Get your discount code >>

New! Ask ACCA AI Tutor

Post your questions
& get instant answers

ACCA PM Sep 2022

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › ACCA PM Sep 2022

  • This topic has 7 replies, 3 voices, and was last updated 10 months ago by John Moffat.
Viewing 8 posts - 1 through 8 (of 8 total)
  • Author
    Posts
  • September 12, 2022 at 6:03 pm #666246
    Logesh
    Member
    • Topics: 1
    • Replies: 5
    • ☆

    Can anyone help me with this question?

    Lewis Co is considering automating its production line. If it chooses to do so, fixed costs will rise from $40,000 per year to $120.000 per year, while variable costs will fall from $22 per unit to $12 per unit.

    What is the minimum annual production level at which automation would be worthwhile (to the nearest unit)?

    September 13, 2022 at 7:00 am #666259
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 53174
    • ☆☆☆☆☆

    He will have extra fixed costs of $80,000.

    Each unit produced will save $8 in variable costs.

    So how many units will he need to produce in order to save $80,000?

    September 13, 2022 at 3:17 pm #666284
    Logesh
    Member
    • Topics: 1
    • Replies: 5
    • ☆

    10,000 units

    September 13, 2022 at 3:33 pm #666292
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 53174
    • ☆☆☆☆☆

    Correct!

    September 13, 2022 at 11:20 pm #666315
    saulatr
    Participant
    • Topics: 11
    • Replies: 42
    • ☆☆

    I think he will save 10$ per unit as it is 22-12, final answer would be 8,000 units.

    September 14, 2022 at 8:59 am #666352
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 53174
    • ☆☆☆☆☆

    Sorry – you are correct. I read the question too quickly 🙁

    November 17, 2022 at 4:53 pm #671740
    saulatr
    Participant
    • Topics: 11
    • Replies: 42
    • ☆☆

    Sir John would this not be solved theough high-low method

    November 18, 2022 at 8:47 am #671785
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 53174
    • ☆☆☆☆☆

    No, not really. It is just using basic knowledge and arithmetic 🙂

  • Author
    Posts
Viewing 8 posts - 1 through 8 (of 8 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

 

ACCA Qualification syllabus changes for 2023/24

Need verifiable CPD for 2023? 21 units of FREE CPD on offer from ACCA

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

NEW! Download the ACCA Pass Guide

ACCA mock exams and debrief videos

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Donate

If you have benefited from OpenTuition please donate.

ACCA CBE 2023 Exams

Instant Poll * How was your exam, and what was the result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

PQ Magazine

Latest comments

  • John Moffat on Inventory Control (part 1) The EOQ Formula – ACCA Management Accounting (MA)
  • John Moffat on Discounted Cash Flow Further Aspects, Lease versus Buy – ACCA Financial Management (FM)
  • fruitella on Inventory Control (part 1) The EOQ Formula – ACCA Management Accounting (MA)
  • sanjarmakh on Discounted Cash Flow Further Aspects, Lease versus Buy – ACCA Financial Management (FM)
  • rossy981 on Statutory Interpretation Presumptions, Delegated Legislation – ACCA Corporate and Business Law (LW) (ENG)

Copyright © 2023 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in