# short term decision making

donnas1977
Well-KnownRegistered Posts:

**182**
Can someone work the following for me on short term decision making. We have given the information below and also a sales forecast of 910,000 during the year,

Product robin

Budgeted sales and production 750,000

Machine hrs required 3,750,000

Sales revenue (£) 9,000,000

Direct materials (£) 2,250,000

Direct labour (£) 2,625,000

Variable overheads 1,500,000

Fixed costs 2,450,000

I got confused by the book how they got the contribution unit which i understand is selling price per unit – total variable cost per unit. The book gives the answer as £12 – (3+3.5+2) = 3.50.

where does this come from. I get my answer as 0.63 which doesn’t look right, can someone point me in the right direction?

Thanks

Donna

Product robin

Budgeted sales and production 750,000

Machine hrs required 3,750,000

Sales revenue (£) 9,000,000

Direct materials (£) 2,250,000

Direct labour (£) 2,625,000

Variable overheads 1,500,000

Fixed costs 2,450,000

I got confused by the book how they got the contribution unit which i understand is selling price per unit – total variable cost per unit. The book gives the answer as £12 – (3+3.5+2) = 3.50.

where does this come from. I get my answer as 0.63 which doesn’t look right, can someone point me in the right direction?

Thanks

Donna

0

## Comments

2,034Direct materials (£) 2,250,000

Direct labour (£) 2,625,000

Variable overheads 1,500,000

[email protected]

www.sandyhood.com

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