• 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 September 2025 exams.
Get your discount code >>

Question Arwin from Kaplan

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Question Arwin from Kaplan

  • This topic has 3 replies, 2 voices, and was last updated 9 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • November 28, 2015 at 7:15 pm #286006
    cochem
    Member
    • Topics: 1
    • Replies: 1
    • ☆

    Good evening! I’m trying to settle Q51 Arwin from Kaplan Exam Kit for year 2015.
    In the scenario, Sales revenue equal to 50,000. Cost of sales = 30,000
    Sales revenue is expected to increase by 12% for the first year. And it is said that variable cost of sales makes up 85% of cost of sales.
    So, new revenue will be 56,000 (50,000*1,12).
    As for the VC it is said in the answer (85%* sales) = 28,560.
    Still, I can not understand, how did they get 28,560?
    Because, it this scenario means, that 85% of new level of sales we could not get 28,560.
    What I did, first I tried to calculate prior level of contribution: if COS = 30,000, then we get fixed cost 15% = 4,500. And VC = 30,000 – 4,500=25,500
    So, contribution will be 50,000 – 25,500 = 24,500
    Fixed costs won’t change, and remain 4,500.
    So, I can calculate, that previously, VC represented 51% from Sales (25,500/50,000) and I may suppose, that the same proportion will be for the new year.
    51%*56,000 = 28,560. This is the only logic I see.
    My question is, when it was written in the answer 85%* sales = 28,560 – what did they meant?
    Thank you in advance!

    November 29, 2015 at 7:38 am #286057
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54700
    • ☆☆☆☆☆

    You are misreading the question.

    The variable cost is 85% of the cost of sales – not 85% of the sales.

    The cost of sales at the moment is 30,000, so the variable cost at the moment is 85% x 30,000 = 25,500

    If the sales increase by 12%, then you would expect the variable costs to increase as well by 12%. So 25,500 x 1.12 = 28,650

    November 29, 2015 at 10:19 am #286095
    cochem
    Member
    • Topics: 1
    • Replies: 1
    • ☆

    Thank you very much!

    November 29, 2015 at 11:53 am #286119
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54700
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

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

  • osman-the-zephyr@ on MA Chapter 1 Questions Accounting for Management
  • adebusola on MA Chapter 1 Questions Accounting for Management
  • Sharith on Interest rate risk management (1) Part 5 – ACCA (AFM) lectures
  • Sharith on Interest rate risk management (1) Part 5 – ACCA (AFM) lectures
  • John Moffat on Discounted Cash Flow Further Aspects, Replacement – ACCA Financial Management (FM)

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