• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March and June 2025 exams.
Get your discount code >>

Mock exam question 2016 – probabilistic budgeting

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Mock exam question 2016 – probabilistic budgeting

  • This topic has 3 replies, 2 voices, and was last updated 3 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • May 21, 2021 at 11:17 pm #621375
    ythomas
    Participant
    • Topics: 16
    • Replies: 18
    • ☆

    Management have collected the following information:
    Demand Probability (units)
    Worst possible outcome 10,000 0·3
    Most likely outcome 22,000 0·5
    Best possible outcome 35,000 0·2
    The selling price per unit is $25. The variable cost per unit is $8 for any production level up to 25,000 units. If the
    production level is higher than 25,000 units, then the variable cost per unit will decrease by 10% and this reduction will apply to all the units produced at that level.
    Total fixed costs are estimated to be $75,000.
    Using probabilistic budgeting, what is the expected budgeted contribution of the product?

    A $282,000
    B $357,000
    C $287,600
    D $362,600

    My question is I don’t see where they have decreased the 10% in variable costs… when demand > 25,000 which in this case is 35,000 contribution is 17.80 they have added the 10% instead of subtracting…
    Thank you in advance…

    May 22, 2021 at 8:21 am #621395
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54664
    • ☆☆☆☆☆

    I do not know which exam you are referring to (whether it is in a Revision Kit or from the ACCA website).

    However, if the variable cost decreases by 10% it become $7.20 per unit. Therefore the contribution per unit becomes 25 – 7.20 = $17.80.

    May 24, 2021 at 7:15 pm #621663
    ythomas
    Participant
    • Topics: 16
    • Replies: 18
    • ☆

    Thank you for your help sir

    May 25, 2021 at 8:21 am #621693
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54664
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘Mock exam question 2016 – probabilistic budgeting’ is closed to new replies.

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • nabeelafatima on Using Information Systems – ACCA Performance Management (PM)
  • John Moffat on Irrecoverable Debts and Allowances Example 3 – ACCA Financial Accounting (FA) lectures
  • Fangzi on The cost of capital (part 1) – ACCA (AFM) lectures
  • Coffeeice6 on What is Assurance? – ACCA Audit and Assurance (AA)
  • khalid.zaheer on Irrecoverable Debts and Allowances Example 3 – ACCA Financial Accounting (FA) lectures

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in