# pev 2007 December

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This is my workings
Pickmaster Pickmaster2
Tea processor Operator
£6 x 100 days x 10 operators £6000
£6 x 100 days x 1 operator £600

Depriciation £2000 £9000
Data given

Can you please tell me how they have got their answers. I have look back on this paper as i did it last year and i work with the same answers above. When you look at the data given i just cant understand there interpretaion.

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Re pev 2007

This is my working for pick master 1
Machine cost was £20,000
Depreciation 1st year (2000)
Depreciation 2nd year (2000)

Total £16,000

Pick Master 2

Cost of machine was £90,000
Depreciation 1st yr (9000)
Deprication 2nd yr (9000)
Total £72,000
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The company is considering replacing 8 machines, not just one so if you multiply your figures by 8, you will get the correct answers.
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Jentel wrote: »

Can you please tell me how they have got their answers. I have look back on this paper as i did it last year and i work with the same answers above. When you look at the data given i just cant understand there interpretaion.

Other budgeted information for 2008 is as follows:

1 The forecast harvest will last 100 days and produce 2.5 million kilograms of tea.
2 The selling price of tea will be 45 pence per kilogram.
3 Budgeted turnover is £1,125,000.
4 Tea picker costs will be £150,000.
5 Tea processor operators currently earn £6 per day.
6 Seed and fertilizer costs will be £75,000.
7 Administration costs will be £150,000 if the Pickmaster machines are purchased.
8 Administration costs will be £135,000 if the Pickmaster2 machines are purchased.
9 Distribution costs will be £350,000.

…………………………………………………...........................……..……Pickmaster………………..Pickmaster 2

Turnover……………bullet point 3 ……....................…………..….. 1,125,000…………………. 1,125,000
Cost of sales:
tea pickers…………….bullet point 4 …....................……………..…….150,000…………………… 150,000
tea processor operators (100days x £6 x8 M/c) x10 employee..…. 48,000 …X1 empee..….4,800
depreciation of tea machines …(2K x 8 m/c)…….................…………16,000..(9K x8 M/c). 72,000
seeds and fertilizer……...................bullet point 6 ……………………... 75,000……………………. 75,000
Total cost of sales……….........................………………………………… 289,000…………………… 301,800

Gross profit…………………………………............................……………… 836,000…………………… 823,200
Administration costs……………bullet point 7.…………… ...................150,000…point 8……..135,000
Distribution costs……………………………………........................………. 350,000…………………… 350,000
Operating profit……………………………………..........................………. 336,000…………………… 338,200
• Registered Posts: 60 Regular contributor ⭐
Pev Dec 2007 - Thanks for responding
safrica wrote: »
The company is considering replacing 8 machines, not just one so if you multiply your figures by 8, you will get the correct answers.

Oh my goodness. You are so right. I feel so silly now. i have never realised this and no one else has ever noticed to tell me this. At least i know i can do it. Thanks for the rest of you that replied but this response was the simplist for me

Thanks again

Sorry for the delay in replying but not always able to log on here

good luck to all taking exam next week