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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Selling price

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- April 9, 2022 at 9:53 am #652942
Budgeted output is 16000 and budgeted contribution is 14$ per unit. Budgeted profit is 140000 and budgeted variable cost are equal to fixed costs, what is the selling price per unit?

Answer 14×16000= 224000 then 140000+224000=364000

364000/16000= 22.75

I am confused how do you find selling price per unit with the above dataApril 9, 2022 at 2:42 pm #652955The budgeted contribution = 16,000 x $14 = $224,000.

Profit = contribution – fixed costs, and therefore the fixed cost is 224,000 – 140,000 = $84,000.

Therefore the variable cost also equals $84,000.

Contribution = sales less variable cost, and therefore the sales = 140,000 + 84,000 = $224,000.

There are 16,000 units and therefore the selling price per unit = 224,000 / 16,000 = $14.

Again, why are you attempting questions for which you do not have the answers?

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