- This topic has 3 replies, 2 voices, and was last updated 2 years ago by
.
- Posts
MEDICAL TEMP CO
hello sir, my doubt is that when we find the budgeted quantity or the actual quantity why was it divided by the market rate per week, instead of for a quarter, like in a quarter there are 13 weeks right? sice theyve given the values for quarter.my next doubt is why have they not used the actual contribution margin of 75%?
The budgeted quantity and actual quantity are divided by the market rate per week because the information provided in the question refers to weekly contracts.
The company is supplying medical staff on temporary weekly contracts to local hospitals. Therefore, the quantities and revenues are calculated on a weekly basis.As for the actual contribution margin of 75%, it is not used because the question states that the company assumed it would maintain its standard contribution margin of 80% for both nurses and doctors. The actual figures provided in the question are different from the assumptions made in the budget. Therefore, the standard contribution margin of 80% is used for the calculations.
thank you…but if the values were for a quater it has to be divided by quarter right? 1000*13 weeks?
- You must be logged in to reply to this topic.