A-LevelAccountingCost-Volume-Profit (CVP) AnalysisOct/Nov 2022Paper 1 Q281 Mark
A company provides the following information for a year. sales: 400000 total variable costs: 240000 total contribution: 160000 total fixed costs: 100000 profit for the year: 60000 To increase the sales volume by 20%, the company plans to reduce the selling price by 10%. Total fixed costs and variable cost per unit will remain unchanged. By how much will profit for the year change?
A8% increase
B10% decrease
C21.33% increase
D26.67% decrease
✓ Correct Answer
The correct answer is D: 26.67% decrease
📋 Examiner Report & Trap Analysis
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...
🎯 Mark Scheme Breakdown
Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.
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