Pev 2008

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just_divorced@hotmail.com
just_divorced@hotmail.com Registered Posts: 2 New contributor 🐸
in AAT Level 4 (Level 8 in Scotland)
On section two did anyone have any trouble deciding which volume to recommend for outsourcing. I thought it could be either one depending on how you looked at it. Scenario 1 had the highest profit margin but then scenario 2 (14,000 units) had the lowest cost but also the lowest selling price. I chose scenario 1(10,000 units)and gave my reason as being the highest profit margin. Did anyone else have the same trouble or was it just me?

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  • tamworth
    tamworth Registered Posts: 21 New contributor 🐸
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    just_divorced@hotmail.com wrote: »
    On section two did anyone have any trouble deciding which volume to recommend for outsourcing. I thought it could be either one depending on how you looked at it. Scenario 1 had the highest profit margin but then scenario 2 (14,000 units) had the lowest cost but also the lowest selling price. I chose scenario 1(10,000 units)and gave my reason as being the highest profit margin. Did anyone else have the same trouble or was it just me?

    I did too. But the selling price for the 14k units were selling lower then what the 10k units did. Also the cost of sales obviously increase due to the increase of units.
  • AshSimcock
    AshSimcock Registered Posts: 6 New contributor 🐸
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    sounds good to me...
  • mi|kshake
    mi|kshake Registered Posts: 70 Regular contributor ⭐
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    After I used the previous task to work out the figures in 2.2, I didn't look back to 2.1 when recommending. I err....recommended both! Which, yes, did strike me as a bit odd lol!

    mi|kshake~
  • Sonny_L
    Sonny_L Registered Posts: 201 Dedicated contributor 🦉
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    I recommended scenario 1 for outsourcing and scenario 2 to stay inhouse.
  • bigmuggsy
    bigmuggsy Registered Posts: 92 Regular contributor ⭐
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    I recommended both aswell!!! Terrible question
  • >Michaela<
    >Michaela< Registered Posts: 37 Regular contributor ⭐
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    I recommended oustsourcing 10,000 units as the cost per unit worked out cheaper if you outsourced it, whereas for 14,000 the cost per unit was cheaper if voltair made it.
  • fpettifer
    fpettifer Registered Posts: 40 Regular contributor ⭐
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    yes i recommended outsourcing 10000 units as i thought Voltair saved more money that way.

    I agree though why not send both to Romania as 14000 units also saved money just not as much. ( i didn't put that though)
  • Midmac
    Midmac Registered Posts: 9 New contributor 🐸
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    fpettifer wrote: »
    yes i recommended outsourcing 10000 units as i thought Voltair saved more money that way.

    I agree though why not send both to Romania as 14000 units also saved money just not as much. ( i didn't put that though)

    For 14000 units i had a cost of £725 per wheras when voltair made it the cost was something like £714.29

    Therefore it was more expensive to outsource.

    For 10,000 units i had it at being £45 cheaper pre unit. (Extra £150 on buying it over making it less savings of £195 avoidable fixed overheads)

    Pretty sure that was right. Also showed answers in total cost ( 10,000 x new cost per unit )
  • Bex
    Bex Registered Posts: 33 Regular contributor ⭐
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    Flipping Voltair question grrrrrrr lol.

    I put outsource both as they were both cheaper (or so my calculations showed). I didn't realise that it said outsource one or the other, so I went and put both scenarios can be outsourced.

    Oh well, it's done now, silly billy eh!

    xxx

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