PCR Dec 2004 exam

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:10AM in AAT student discussion
Hi <BR>Can anyone help me with this<BR>Im having a go at dec 2004 pcr section 2 on the flexed budget and cant work out how to do the stepped maintenance costs.<BR>It says that for every £20,000 spent on maintenance Eboracum can produce up to 10,000 Yorkers.<BR>The answer is £180,000 being £20,000 x 9<BR>I dont understand where the 9 comes from<BR>Hope you dont think im being thick on this.<BR>Thanks<BR>Anne

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    PCR Dec 2004 exam

    I find the easiest way to think of a stepped cost is as if you are hiring a team. Imagine that here, it costs £20,000 to hire each maintenance team, and each team can handle up to 10,000 units. You cannot hire a part of a team.<BR><BR>In this question you were flexing to 85,000 units, so have to decide how many maintenance teams will be needed. If each team can handle up to 10,000 units, 8 teams can handle up to 80,000 units. To produce any more, you must hire an entire extra team, bringing you up to 9. This will enable you to make anything from 80,001 units up to 90,000 units, but you cannot hire half a team to produce 5,000 units.<BR><BR>Hope that helps,<BR><BR>Andrew Harrington
  • System
    System Posts: 100,534 🤖 Admin 🤖
    PCR Dec 2004 exam

    Hi Andy<BR><BR>Thats great thanks. Even the books didnt explain it as easy as that!!<BR><BR>Anne

Categories

Privacy Policy