Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBL Exams › Hello,I am doing EPSM and stuck with unit 8.I can not get anwers of these 6 Q
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Ken Garrett.
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- October 3, 2025 at 10:04 pm #723027
Question
01/06
As a result of MEXIT, Telford Engineering had lost 30% of its pre-MEXIT export sales to CETA customers, due to increased trade and tariff barriers with CETA. (See P/L account before MEXIT in the spreadsheet). A new opportunity has now been negotiated to sell the original 30% post-MEXIT loss in CETA exports to a range of customers in alternative export markets on another continent. These can be sold at the same price, bringing the factory back to full capacity. The materials cost of these additional sales, as a percentage of sales to the nearest whole percentage, will be the same as it is currently (See P/L account one year after MEXIT under the outsource option in the spreadsheet).Calculate the effect on net profit (to the nearest $M’000). For your answer only provide the first three numbers and do not include any symbols, for example, “543”.
Question
02/06After MEXIT the exchange rate value of $M fell from $C1.40 to the current rate of $C1.12. This has meant that the material imports from CETA have become significantly more expensive. The translated cost of these imported materials from CETA in the current P/L account is $M’1,100,000. The purchasing team have identified an alternative domestic supplier source for all of the imported materials from CETA, who will charge Telford Engineering the same amount as it originally cost the company to import these materials at the pre-MEXIT exchange rate.
Calculate the effect on net profit (to the nearest $M’000). For your answer only provide the first three numbers and do not include any symbols, for example, “543”.
Question
03/06
Non-core functions in the General Administration department can be outsourced, saving 20% of the staff costs and other costs, included immediately below under the general admin heading, as stated in the current P/L account.Calculate the effect on net profit (to the nearest $M’000). For your answer only provide the first three numbers and do not include any symbols, for example, “543”.
Question
04/06Following an innovative business process improvement proposal in manufacturing at no extra development cost, it is possible to reduce the current staff costs in production, by 40%
Calculate the effect on net profit (to the nearest $M’000). For your answer only provide the first three numbers and do not include any symbols, for example, “543”.
Question
05/06An option to repurpose the main product of Telford Engineering can now be explored. This option is to construct steel reinforcement frames for factory construction in countries vulnerable to earthquakes. This would mean that all current spare capacity could be committed to this additional product. This will increase the current sales value by 10% and the materials costs will remain at 30% of sales for this additional output.
Calculate the effect on net profit (to the nearest $M’000). For your answer only provide the first three numbers and do not include any symbols, for example, “543”.
Question
06/06
One of the Strategy and Development sub-committee members suggested that as Telford Engineering has core capability in constructing steel frames for bridge building, all the spare capacity could be used to fabricate a completely new, but similarly constructed product using the same process of manufacture. The proposal is to start producing ‘booms’ or ‘jibs’ for large crane manufacturers. This would cost $240,000 in additional development costs to convert and create spare capacity, but will open a completely new higher value market for Telford Engineering, increasing the current sales value by 20%. The higher sales margin would mean that the total cost of materials for this product will only be 25% of sales.Calculate the effect on net profit (to the nearest $M’000). For your answer only provide the first three numbers and do not include any symbols, for example, “543”.
P/L Accounts are here
“Menai $,000 P/L
(before MEXIT)”
Sales 8,000
* Note: Exports to CETA based customers pre-MEXIT = 40% and the volume of these fell by 30% post-MEXIT
Costs Production costs
Materials ** -2,000
** Note: 50% of imports Pre-MEXIT are from CETA based suppliers
Staff costs -1,500
Overheads -300
Distribution costs
Staff costs -600
Other costs -160
Gen Admin costs
Staff costs -900
Other costs -200
Accounting costs * -800
Finance costs -100Net profit 1,440
Exchange rate: C$/M$ 1.40
and“Menai $,000 Actual P/L
(one year after MEXIT under outsource option)”
Sales 7,200
* Note: Exports to CETA based customers pre-MEXIT = 40% and the volume of these fell by 30% post-MEXIT
Costs Production costs
Materials ** -2,160
** Note: 50% of imports Pre-MEXIT are from CETA based suppliers
Staff costs -1,800
Overheads -300
Distribution costs
Staff costs -680
Other costs -160
Gen Admin costs
Staff costs -1,000
Other costs -200
Accounting costs * -700
Finance costs -100Net profit 100
Exchange rate: C$/M$ 1.12October 5, 2025 at 8:03 am #723033This is the SBL forum. Sorry, can’t help you with these queries.
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