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contribution

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › contribution

  • This topic has 3 replies, 3 voices, and was last updated 11 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • September 18, 2013 at 5:31 am #140728
    syed ali
    Member
    • Topics: 92
    • Replies: 54
    • ☆☆

    contribution per unit always remains same what the level of activity is

    September 18, 2013 at 10:06 am #140758
    syed ali
    Member
    • Topics: 92
    • Replies: 54
    • ☆☆

    is i am right

    September 18, 2013 at 1:24 pm #140776
    pannanikt
    Member
    • Topics: 8
    • Replies: 83
    • ☆☆

    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.

    September 18, 2013 at 4:50 pm #140793
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54733
    • ☆☆☆☆☆

    pannanikts answer to your question is perfect 🙂

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