A-LevelAccountingBudgeting and Decision MakingMay/June 2021Paper 1 Q281 Mark

The following information is available for a month. per unit $ selling price 100 contribution 30 Total fixed costs were $100000 and budgeted sales were 5000 units. The directors think that if they reduce the unit selling price to $95, sales will increase to 6500 units a month. What would be the increase in profit as a result of this?

Q: What is the correct answer to this A-Level Accounting question?

The correct answer is A: $12500.

Q: What topic does this question test?

This question tests Budgeting and Decision Making in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

A$12500

B$32500

C$45000

D$77500

✓ Correct Answer

The correct answer is A: $12500

📋 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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About This A-Level Accounting Question

Topic

This multiple-choice question tests Budgeting and Decision Making in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Source

This question appeared in the Cambridge A-Level Accounting May/June 2021 examination, Paper 1 Variant 2.

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