A-LevelAccountingDecision Making (Cost-Volume-Profit Analysis)Oct/Nov 2021Paper 1 Q291 Mark
A manufacturer has a target profit of $80000 per annum. Last year the business made a profit of $60000 when 10000 units were produced and sold. Contribution was $10 per unit. In order to achieve the target profit the plan is to increase advertising by $10000 per annum. Variable cost per unit and selling price per unit will remain unchanged. What will be the total fixed cost if this plan is carried out?
A$20000
B$30.000
C$40000
D$50000
✓ Correct Answer
The correct answer is D. This question tests the candidate's understanding of decision making (cost-volume-profit analysis) within the Accountingsyllabus. The examiner's mark scheme requires...
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Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
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