ECR June 07 Task 2.2 & 2.3 :crying:

zoewyatt
zoewyatt Registered Posts: 7 New contributor 🐸
in AAT Level 3 (Level 6 in Scotland)
Hi

I am really struggling with Task 2.2.

I have to take information from Task 2.1 which I understand.

I don't understand what the 'Contribution' represents. I looked at the answers online but cannot get my head around it.

Task 2.3

I don't understand the figure to get 'driver hours per mile' please help.:crying:

Also I need to simplfy 'Commercial issues'. I find it very difficult to explain this and my book is not helping. So if anyone can help with suggestions I really would appreciate it.

Many thanks

Zoe

Comments

  • carla030698
    carla030698 Registered Posts: 112 Dedicated contributor 🦉
    Hope this helps

    Hi Zoe

    Iv been having a bit of a nightmare with contributions and safety margins too, which is not good news as iv got the exam on Wednesday! :001_unsure:

    For the contribution in this task you have to deduct the total variable costs in task 2.1 from the sales revenue.

    For the driver hours per mile, you divide the number of driver hours required by the number of miles in the route.

    Hope this helps!

    Carla x
  • tallrodney
    tallrodney Registered Posts: 24 New contributor 🐸
    Zoe,

    A marginal cost is defined as a cost that changes directly inrelation to output therefore all variable costs are deemed to be marginal costs.

    To get the contribution you take the selling price less the variable costs.

    The contribution firstly goes towards paying the fixed costs once they have been paid you will make a profit.

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