Hello Sir,
Question :
A profit centre manager claims that the poor performance of her division is entirely due to factors outside
her control.
She has submitted the following table along with notes from a market expert, which she believes explains
the cause of the poor performance:
Sir, isnt the material costs will be just 500 dollar less and therefore flexed will be 9500 and we got the materials in even less amount isnt it a good thing? I dont understand why its a poor performance ?
Ask the Tutor ACCA PM
September 2016
5y ago#1Last year the materials cost $8,000/400 = $20 per unit (and that is what they budgeted for this year).
Suppliers lowered their prices by 5%, and therefore they should have paid less than $20 per unit.
They actually paid $6,500/300 = $21.67 per unit which seems like poor performance :-)
Oh yeah I should have calculated it in per unit.. got it now.!
5y ago#3You are welcome :-)
This topic is locked — no new replies.