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- This topic has 3 replies, 2 voices, and was last updated 9 months ago by John Moffat.

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- May 1, 2022 at 5:00 am #654691
Sir, can I post MCQ test queries here?

I also got wrong for Q.1 Chapter 7, very confused about the % of cost-plus, mark up, and gross profit margin, can provide some hits to easily identify the equation?

And for the absorption costing, fixed overhead costs should be allocated to a product whether or not it was sold in the period, but why the overhead cost of $5 is excluded here?

May 1, 2022 at 10:04 am #654705You can post them here, but you also posted the same question under the test and I have answered it there 🙂

The overhead cost has not been excluded. The total cost is 10 + 8 + 3 + 5 = $26.

The gross profit margin is the profit as a % of the selling price. So for every $100 selling price, the profit is $20 and therefore the cost is $80. Putting it the other way round, for every $80 cost, the selling price is $100. Therefore for a cost of $26, the selling price must be 100/80 x $26.

(Mark-up is the profit as a % of the cost. You can find more examples of both the gross margin and the mark-up in the Paper FA lectures on “mark-ups and margins”)

May 5, 2022 at 12:20 pm #654965Thank you, sir.

Sorry, I overlook for $5 fixed overhead costs.

I think I do need to practice more to check different scenarios on % of either cost plus, mark up or profit margin.

And I am quite afraid of arithmetic calculation for different topics, lots of lots calculation but quite understood on the rationale behind in essay part. 🙁

May 5, 2022 at 3:03 pm #654972It is just practice. I assume that you have a Revision Kit from one of the ACCA Approved Publishers? They are full of past exam and other exam standard questions for practice.

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