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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Cost Card
In a cost card detail is given as 10litres of oil is needed costing $8 per litre
And further says that during work 5% gets spilled
To work out cost they have done 10litres * 8*100/95
Now my understanding is that in order to have 10 liters we need to buy 10.5 as 0.5 gets spilled
So cost will be 10.5*8=84
But the answer key way gives answer as 84.21
The question does not say that 0.5 gets spilled. If they buy 10.5, then 10.5 x 5% will get spilled and that does not leave you with 10 litres.
For every 100 bought, 5 will be spilled which leaves 95. Putting the other way round, for every 95 needed it means buying 100.
Therefore if 10 are needed then they have to buy 10 x 100/95
But sir if they say 5% gets spilled
10*5% =0.5
So if requirement is 10 I should buy 10+0.5
That logic should be correct isn’t it
No, it is not correct.
They lose 5% of whatever they buy.
If they bought 10.5 litres then they would lose 5% x 10.5 = 0.525 litres and therefore would only end up with 10.5 – 0.525 = 9.975 litres, which is not enough!
Read my previous reply again 🙂
It does make sense yes.
1/2 means every 2 has a 1
Is that the same reason for 100/95
Every 95 I need 100
Correct 🙂