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Maximum profit calculation

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Maximum profit calculation

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.
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  • October 16, 2015 at 1:16 pm #276657
    umar2005
    Member
    • Topics: 21
    • Replies: 12
    • ☆

    Hello Sir John.
    i jst want to know if return per factory hour is given in the question and they want us to calculate maximum profit then we calculate maximum profit by taking return per factory hour and multiply it by total hours to produce the units? is it true? because normally we 1st calculate sales revenue then minus direct material cost and thn minus fixed cost/ factory cost and thn we gt profit figure. what is the right way? actully i am doing bpp kit question 16 thin Co and i am little bit confused in calculating profit.i did by using sales – directmaterial -fixed cost approach and in the bpp kit they use return per factory hour and multiply by total hours required to produce the units.

    October 16, 2015 at 3:08 pm #276669
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 51532
    • ☆☆☆☆☆

    I am away from home until Sunday evening, and I do not have the BPP Revision Kit with me.

    However this would appear to be a question on throughput accounting – you really need to watch the free lecture on throughput accounting which explains what is happening and why. The way you say that BPP have done it is correct.

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