Budget preparation question from kaplan exam kit

RSRaj Shekhar1y ago

A company makes 2 products, X and Y, which are sold in the ratio 1:2. The selling prices are $50 and $100 respectively. The company wants to earn $100,000 over the next period. What should the sales budget be? X (units) Y (units) A 1,334 667 B 800 400 C 667 1,334 D 400 800 Ans. 400 X and 8000 Y I can not figure out how they arrived at this answer. Unfortunately, my maths is not strong and I struggle with such questions. Could you please explain how the answer was calculated? Could you also suggest what mathematical topics I should study so I wont have any issue when I get to the professional level papers?

John MoffatAdmin1y ago#1

For every 3 units sold, 1 of them will be X and 2 of them will be Y. Therefore the total revenue from every 3 units will be 1 x $50 + 2 x $100 = $250. So to get a total of $100,000 they need to sell 100,000 / 250 = 400 sets of 3 units. Since each set of 3 units is 1 unit of X and 2 units of Y, it means then need to sell 1 x 400 = 400 of X, and 2 x 400 = 800 of Y. I cannot really list the topics needed for future exams, although once you have sorted out Paper MA you should not find much extra to worry about in the later exams (where for many questions you will be answering using spreadsheet formulae).

RSRaj Shekhar1y ago#2

Thank you!

John MoffatAdmin1y ago#3

You are welcome :-)

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