June 15 Merkland Sportswear

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July 11, 2019 at 2:48 am #522459
zkaay
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Hi sir,

Part ii

The answer is

Extra units needed to cover that loss = 5.5/5199 = 105,973

1) What is the formula used here (which item divide by which item.)

2) how to arrive to 5199 figure

Thank u so much
July 11, 2019 at 11:03 am #522575
Ken Garrett
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New contribution = 75 – 21 x 1.1 = 51.9

The loss of operating profit (in answer workings) 5,500,000. This has to be recouped by selling more units, each making 51.9 contribution.

Extra volume needed is therefore: 5,500,000/ 51.9 = 105,973.
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