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Qn 100 bpp

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Qn 100 bpp

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.
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  • February 2, 2021 at 11:56 am #608841
    nk16
    Participant
    • Topics: 71
    • Replies: 39
    • ☆☆

    Hello..
    I didn’t understand how they found the profit mark up …first they were using foh for the year then they took foh per unit..it’s confusing me …how to do this qn plz explain

    February 2, 2021 at 2:16 pm #608857
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54701
    • ☆☆☆☆☆

    For breakeven, the contribution must equal the fixed overheads and must therefore be $20,000.

    They budget on selling 500 units per year, and therefore for breakeven the contribution must be $20,000 / 500 = $40 per unit.

    The marginal cost is $20 per unit and therefore the mark-up on marginal cost must be 40/20 = 200%

    Have you watched my free lectures on CVP analysis?

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