ECR June 2009 Question

Hi,
I am struggling to find the answer to task 2.3 a,b+c.
Do you know where you get the 50p from?
Can someone try and explain the answer to me because im confused?
Thank you
Emma
I am struggling to find the answer to task 2.3 a,b+c.
Do you know where you get the 50p from?
Can someone try and explain the answer to me because im confused?
Thank you
Emma
Comments
Did you make an attempt of your own at the question?
There are several correct approches to finding
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If so, you could get the right answer.
[email protected]
www.sandyhood.com
No i got £80p-30p = 50p 312,500/0.50p=£625,000
Fixed costs of £312,500 divided by the contribution earned every time one unit is sold (£0.50)
If I had £312,500 and I divided it by £0.50 I could say there are 625,000 50 pences in £312,500
In other words I must sell 625,000 units if I am to collect enough 50 pences to pay the fixed costs.
So £312,500/£0.50 = 625,000 units
and this is not the same as £625,000
In this exam a large number of candidates then said:
If I must sell 625,000 units to breakeven then the breakeven sales revenue must be this number of units x the price per unit (£0.80)
625,000 x £0.80 = £500,000
and got it right
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