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question confusion

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › question confusion

  • This topic has 3 replies, 3 voices, and was last updated 8 years ago by AvatarJohn Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • January 4, 2018 at 9:35 pm #427281
    AvatarAnonymous
    Inactive
    • Topics: 1
    • Replies: 0
    • ☆

    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 2,000

    At 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 models

    January 5, 2018 at 8:58 am #427314
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54839
    • ☆☆☆☆☆

    Please 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 #427571
    Avatarkomailnaqvi
    Member
    • Topics: 3
    • Replies: 2
    • ☆

    Sir 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 #427584
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54839
    • ☆☆☆☆☆

    Please do not post the same question twice.

    The answer is correct, and I have replied to your other post.

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘question confusion’ is closed to new replies.

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