A-LevelAccountingTraditional costing methods9706/12 · Oct/Nov 2022 · 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

D: 26.67% decrease

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Topic: Traditional costing methods, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Oct/Nov 2022 Paper 1 Variant 2, question 28.

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