Day: April 18, 2021

The table shows the fixed budget for a business as follows.

sales and production units  —  20,000

sales value  —  £400,000
variable costs  —  £280,000
fixed costs  —  £50,000

Actual production and sales were 14,000 units.

Using a fixed budget, what would profit be?

Select ONE answer:

1. £28,000
2. £34,000
3. £49,000
4. £84,000

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 2

1. Not correct
2. Correct ==>  £400,000 / 20,000 – £280,000 / 20,000 = CM £6 * 14,000 units – £50,000 ==> £34,000
3. Not correct
4. Not correct

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