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Merkland Sportswear- June 15. Q1 (iv)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA APM Exams › Merkland Sportswear- June 15. Q1 (iv)

  • This topic has 1 reply, 2 voices, and was last updated 6 years ago by Ken Garrett.
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  • November 12, 2018 at 6:58 pm #484631
    kaffie
    Participant
    • Topics: 7
    • Replies: 26
    • ☆

    Dear Tutor,

    In part iv of the question, where we are asked to evaluate the impact of the new factory on the values and metrics in the dashboard, why did we have to calculate a new operating profit (according to the suggested solution) for year 20×5? instead of using the $71m operating profit figure already given in the dashboard?.

    The scenario had stated to assume a profit figure of $103m as a result of the new factory, I would have thought we would compare the $71m operating figure in the dashboard with this $103m to get the loss on operating figure for the company.?

    Thank you.

    November 13, 2018 at 10:45 am #484684
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10594
    • ☆☆☆☆☆

    103m is before development and marketing so is not the ‘final’ operating profit. The new profit has been calculated by subtracting the loss in contribution (108 – 103) from the 20X5 operating profit.

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