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John Moffat.
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- January 4, 2018 at 9:35 pm #427281
Anonymous
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A company has produced the following budget based on orders for the domestic market:
£
Sales (4000 units x £5 ) 20,000
Cost of Sales:
Direct Material (4000 units) 2,000
Direct Labour 8,000
Variable Overhead 2,000
Fixed Overhead 6,000
Profit 2,000At production of 4,000 units the company still has spare capacity. However the amount of extra raw materials available is limited to £375.
The company is investigating two options;
1) To sell the additional standard units abroad where the selling price and variable costs would be the same as at home and there would be no additional fixed costs.
2) To produce 200 deluxe models for the home market and sell them at £X each. These would require twice the amount of materials as the standard product. Any materials left over could still be use for standard units which could be sold abroad at the same price as the home market.Required.
What is the minimum price that should be charged for the deluxe modelsJanuary 5, 2018 at 8:58 am #427314Please do not set test questions and expect an answer!
You must have an answer in the same book in which you found the question. Ask about whatever it is in the answer that you are not clear about, and then I will help you.
January 7, 2018 at 3:33 pm #427571Sir in chapter 7 example 6 answer you have taken selling price as 120 but in question it is 100. And all calculation of your answer is based on 120 so where did u get this 120?
January 7, 2018 at 5:49 pm #427584Please do not post the same question twice.
The answer is correct, and I have replied to your other post.
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