Accounting Multiple Choice Question – 3 March 2021

A company manufactures a single product as shown. 

• selling price £20 per unit
• variable costs £15 per unit 

Its budgeted fixed costs are £200,000.

How many units must the company sell to make a net profit of £50,000? 

Select ONE answer:

1. 10 000 units
2. 30 000 units
3. 40 000 units
4. 50 000 units 

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Not correct
4. Correct – CM = £20 – £15 = £5 ==> £200,000 / £5 = 40,000 units ==> £50,000 Profit / CM £5 = 10,000 units TOTAL 50,000 units

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