level 4, synoptic assessment task 4

genesta

Hi.
I am preparing for exam in February. Not fun..
The 1st mock assessment from aat site, task 4. Please help if you can.
The issue I have is: I have no idea what to do here. The funny thing is - I knew time ago..
The contribution calculations suddenly doesn't work for me.






Here are the answers.




Thank you, if you can explain me a bit of this.

bethfarmer121

The marginal cost per unit is worked out like this

18 x 1.15 = 20.70 (this is because it is the direct costs and the variable portion of the overheads which is 15% of the direct costs)

To undercut the competition is the competition price (from the spreadsheet given in the question) minus the marginal costs (21.00-20.70 = 0.30) then multiply by the number of units (0.30 x 250 = 75)

You can repeat the above process for the market price and spreadsheet price

genesta

Thank you! Somehow i sorted it.
Sorry for being late with reply.
Thank you a lot!