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Gross margin and percentages queries

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Gross margin and percentages queries

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.
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  • Author
    Posts
  • November 13, 2015 at 4:36 pm #282189
    sm8980
    Participant
    • Topics: 48
    • Replies: 38
    • ☆☆

    Hi,

    I have a couple of questions:

    1) in the exam kit of Kaplan question 283, it mentions there is a gross profit margin of 25% and the retailer wishes to increase sales within a certain month by $2000 and in the same month increase payables by $3000. Also in the question they have given information of the credit sales for the retailer and receivables. They have asked to calculate the budgeted payment to the supplier. I don’t understand the working. Please could you help.

    2) this is a bit of a different question, generally used in the module. Whenever I have seen, for example a question with idle time, and for the amount to be paid for the labour hours including idle time, assume it’s 1000 hours of labour, 20% idle, why do you divide by 0.8 to find the total hours? So 1250 total.

    Thanks very much for your help, and for providing the service. And do let me know if you need anything further info.

    November 14, 2015 at 7:14 am #282255
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 51532
    • ☆☆☆☆☆

    I don’t have the Kaplan exam kit and so I can’t help you with the first question.

    With regard to your second question, for every 100 hours that are paid for they are idle for 20 hours and therefore work for 80 hours.
    Putting it the other way round, for every 80 hours that they work, they will need to pay for 100 hours.

    So if they work for 1,000 hours, they will need to pay for 100/80 x 1,000 = 1,250 hours.
    (of which 20% x 1250 = 250 hours are idle and the other 1,000 hours are worked).

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