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Hello Sir,
Can you please answer me, how they did calculate the Contribution to sales Ratios in%?
Question 18 in BPP Rev Kit exams up to June 2014.
It is in part B) For each of the three products (W,Y,Z), calculate the relevant contribution per $ of material B for the next quarter.Product W Y Z
SP $10 $15 $30
Relevant contribution 0.80 (2.10) 3.60
Contribution to sales ratios (%)
8% (14%) 12%
SIr , can you tell me how they got 8%, (14%), 12%??Thank you in advance.
They have divided the contribution by the selling price – that is what the CS ratio is defined as!
(0.8 / 10 = 8%)I do suggest that you watch our free lectures on CVP analysis.
(Our free lectures are a complete course for Paper F5 and cover everything needed to be able to pass the exam well.)
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