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Hello tutor,for the latest publication of the examiner report for March 18, I have a question about that ,the extract is “Given the operational gearing is
33.33%, the fixed cost to variable cost will be in the ratio of 1:3′
How to use the scientific calculator to make the 33.33% to 1:3?or fraction?I wonder how to get it,I hope tutor will help me in this question, Thanks always.for example 2 ,I don’t know how the total of 2000 customer is calculated,Can I know to get the figure and how to calculate the answer?Thank you.
It does not need a scientific calculator – it is basic arithmetic 🙂
Try dividing 100 by 33.33 on your calculator and see what you get.
Just as 25% is the same as 1: 4.With regard to the second question, it is following the instructions in the question.
Each year there are 1,000 new customers, in total 4,000 customers all paying for their first year.
Half of of them leave in a year later and don’t pay any more.
The other half stay one more year and then leave the year after, so in total 1/2 x 4,000 = 2,000 are paying for a second year.@johnmoffat said:
It does not need a scientific calculator – it is basic arithmetic 🙂Try dividing 100 by 33.33 on your calculator and see what you get.
Just as 25% is the same as 1: 4.With regard to the second question, it is following the instructions in the question.
Each year there are 1,000 new customers, in total 4,000 customers all paying for their first year.
Half of of them leave in a year later and don’t pay any more.
The other half stay one more year and then leave the year after, so in total 1/2 x 4,000 = 2,000 are paying for a second year.The lifecycle costing not should be calculated for the whole year of 4 , why are only 2years being calculated?Thank you.
The answer is not only calculating over 2 years!!!
The split between 1 year and 2 years is referring to the profits made in relation to the costs being 400 in the first year of a customer and being only 50 in the second year of a customer.
Over the 4 years, a total of 4,000 are in their first year (1,000 each year) – they pay 300 but the costs are 400.
Over the 4 years, a total of 2,000 (as explain in my previous post) also have a second year – they still pay 300 but the cost is only 50.
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