Evaluating Current & Proposed Activities (old)

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:28AM in AAT student discussion
Hope somebody can help!<BR>I'm looking at an old devolved assessment for ECPA (old standards) and am stuck on question 1! <BR><BR>I am being asked to calculate the probability that some proposed changes will produce a greater profit than the existing budget. <BR><BR>I have calculated a new profit figure (based on expected sales volume), the new breakeven point (no. of packs), and no. of packs needed to produce same profit as existing budget, as reqired by the question. I am also told that there is a 40% chance sales volume will not change from existing budget, 20% chance that sales will increase by half and 40% chance that sales volume will double.<BR>I am confused (I suspect it's because I am quite good at maths and always fail to see that AAT maths is really simple). If anybody remembers how they did this question, please would they give me some pointers!<BR>Thank you, Andrea

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Evaluating Current & Proposed Activities (old)

    hi <BR>i remember bits of this, i think you have to work out 40% of the figures plus the 20% plus 40% (like in three columns totals) and the total of each of these figures add up to your new sales budget proposal figure.<BR>eg 40%= 200<BR> 20%= 100<BR> 40% =200<BR><BR><BR> 100%= 500<BR>this is really hard to explain<BR><BR>something is ringing a bell about the amount the can be produced (look at the first 40% figure is it bigger than the amount that can be done(packs)<BR>you are right I looked too deep at the question<BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Evaluating Current & Proposed Activities (old)

    I suspect that if you calculate profit for the 3 levels of activity you will find that 1 or 2 of them is less than the old profit, so, if sales volume has to double in order to make more profit, the probability of this would be 0.4

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