ecr question
princess246
Registered Posts: 49 Regular contributor ⭐
Im trying to find the revised target profit for my operating statement but im not sure how i get my rveised profit figure? i have worked out my contribution per unit and break even points in units and margin of safety.
Could anyone point me in the right direction please?
Thanks:confused1:
Could anyone point me in the right direction please?
Thanks:confused1:
0
Comments
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In an ECR question you would expect to be asked
- The number of units that need to be sold to achieve a target profit, or
- The sales revenue (turnover) needed to achieve a target profit
For 1. ...........Total Fixed Costs + Target Profit = Units of sales needed to achieve target profit
......................Contribution per unit sold
For 2. ...........Total Fixed Costs + Target Profit = Sales revenue needed to achieve target profit
........... PV ratio (Contribution divided by sales revenue)Sandy
sandy@sandyhood.com
www.sandyhood.com0 -
my contribution is 365,400
my operating profit is 192,400
my fixed costs are 173,000
so do i then add my fixed and operating? and divide by contibution divided by sales revenue?
my anwser is not looking right cant think where im going wrong0 -
We are not yet able to find what you are looking for
I've copied the formulae and added values where I can but the words in blue need values
For 1. ...........Total Fixed Costs + Target Profit = Units of sales needed to achieve target profit
......................Contribution per unit sold
For 1. ...........£173,000 + Target Profit = Units of sales needed to achieve target profit
......................Contribution per unit sold (£365,400/units sold)
For 2. ...........Total Fixed Costs + Target Profit = Sales revenue needed to achieve target profit
........... PV ratio (Contribution divided by sales revenue)
For 2. ...........£173,000 + Target Profit = Sales revenue needed to achieve target profit
........... PV ratio (Contribution divided by sales revenue) (£365,400/total sales revenue)Sandy
sandy@sandyhood.com
www.sandyhood.com0 -
Thats my problem i dont know how to calculate the target profit.0
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well princess ,whos on 25k !!!! target profit is easy ......
shame ive got no job tho !!!
just practice the examples in the books !0 -
I'm a service charge accountant i dont do costing to that extent, i also dont need a qualification to do my job just expeirence.
But thankyou i will practice my brain has turned to mush and i can for the life of me remember how to do it.0 -
Worked it out realised that i was missing part of the question paper!!!!!!!0
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princess246 wrote: »I'm a service charge accountant i dont do costing to that extent, i also dont need a qualification to do my job just expeirence.
But thankyou i will practice my brain has turned to mush and i can for the life of me remember how to do it.
i know i sounded a little bitter about that. but its just there was about 15 in our class at the start of this second year and about 8 havee dropeed out because they found it too hard and all of them worked in an accounting area !
:thumbdown:0 -
princess246
Member Join Date: Dec 2007
Posts: 18
Worked it out realised that i was missing part of the question paper!!!!!!!
If you still need some help after you find it, I'm sure I'm not alone in being willing to help.Sandy
sandy@sandyhood.com
www.sandyhood.com0
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