financial performance task 1.8 paper 2

jazzies123

Hi Guys!
Does anyone know any ideas on task 1.8 on the paper 2 please?

thanks

sara

rosiefaith

Hi Sara,

a) £120,000
Workings: £90 selling price minus the cost of £70 = profit per unit = £20 x 6000 units = £120,000

b)£70 x 8000= £560,000 sales
The variable costs are - £30 x 8000 = £240000
Fixed costs are then flexed. £24 x 10,000/8000 =£30
£30 x 8000 = £240,000

Sales of £560k minus all costs of £480k = £80k

c)£70 x 10,000=£700k
The variable costs are - £30 x 6000 = £180,000
Fixed costs are then flexed. £24 x 10,000/6000 = £40
£40 x 6000 = £240,000

The extra 4000 then cost £45 x 4000 = £180,000

Sales of £700k minus all costs of £600k = £100k Profit

d)£50 / 80% = £62.50
As the 20% is profit margin.

e)£80 x 30% = £24
£80 + £24 = £104

Hope this helped.

sharker

Thanks Rosiefaith,

I was looking for this answer.
Well explained - cheers x

hkaur92

Thanks for this @rosiefaith! The workings for the answer really helped x