- This topic has 3 replies, 3 voices, and was last updated 11 years ago by .
Viewing 4 posts - 1 through 4 (of 4 total)
Viewing 4 posts - 1 through 4 (of 4 total)
- You must be logged in to reply to this topic.
OpenTuition recommends the new interactive BPP books for March 2025 exams.
Get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › contribution
contribution per unit always remains same what the level of activity is
is i am right
Well, yes and no:-) Contribution is the difference between unit selling price and unit variable cost. But it may happen that for example if you increase the level of activity (produce more) you would have to buy more materials and could obtain the bulk discount from supplier, so materials would cost less (effect of scale). In this case contribution would change as the variable cost changed due to change in activity. But if nothing changes – all prices remain the same (selling and purchases) then yes – contribution would be the same no matter how much would you manufactured.
pannanikts answer to your question is perfect 🙂