Practice Assessment 1- Task 7b.


So, I feel like this question is easy but my answers are not coming out the same as the answers given.

My workings for current situation:

Materials
3kg x 5000 units = 15000kg
£5 per 3kg = £25000

Labour
6 hrs x 5000 units = 30000 hrs
£10 per 6 hrs = £50000

Sales
5000 units x £150 = £750000

Fixed costs
£277500

Profit = 397500, whereas the answer given is £300,000 less than this?!

Best Answer

Answers

  • gabriellenlewisgabriellenlewis AAT Student Posts: 128

    Sales revenue = 5000 x £150 = £750000
    Materials: 3x£5=£15 x 5000 units = £75,000
    Labour: 6 x £10=£60 x 5000 units = £300,000
    Fixed costs £277500
    Profit is £750,000 - £75,000 -£ 300,000 - £277,500 = £97,500

    Thank you. Although, I feel like this question is really poorly worded because I understood that to mean "3kg at £5" as 3kg costing £5. It should read "3kg at £5 per kg"!
  • CornishPixieCornishPixie Registered, MAAT, AATQB, AAT Licensed Accountant Posts: 65
    Yes, I agree that the questions are not always that clear. I'm afraid it doesn't get any easier
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