CSTR sample assesment 2 (Costs and revenues AQ2013)

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Slackpants
Slackpants Registered Posts: 10
in AAT Level 3 (Level 6 in Scotland)
Please help!!

I have been going out my mind trying to figure out the answer for 1.6 in sample assessment 2. I have managed to get the first 3 answers correct but then I hit a brick wall... I have checked the remaining answers on the "answers doc" but I cannot seem to get back to those figures no matter what I do?! :'( Thanks!! x

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  • N4T
    N4T Registered Posts: 191
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    Are you still stuck on 1.6?

    So you have already worked out:
    a. Sales revenue per mile £13.00
    b. Variable cost per mile £3.10
    c. Fixed cost per mile (contract 15,600 miles) £3.50

    d. Total cost per mile (contract 15,600 miles)
    TC = VC + FC
    Taking your answers from b&c, TC per mile = £3.10 + £3.50 = £6.60

    e. Profit per mile (contract 18,200miles)
    Profit = Sales Revenue - Total Cost

    SR = 18,200 x £13* = £236,600 (*use answer from a.)
    VC = 18,200 x £3.10* = £56,420 (*use answer from b.)
    FC = £54,600 (given in question)
    Therefore Total cost is £56,420 + £54,600 = £111,020

    Total profit = £236,600 - £111,020 = £125,580
    Hence, Total profit per mile based on 18,200 miles is £125,580 / 18,200 = £6.90

    Hope this helps.

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