Accounting Multiple Choice Question – 8 February 2022

Last month a company made and sold 10 000 units and earned a contribution of £20 per unit.

Its final profit, after deducting total fixed costs, was £120 000.

This month its sales volume has increased by 20%, its contribution per unit has increased by 5% and its total fixed costs have increased by 15%.

What is its profit this month?

Select ONE answer:

1. £118 000
2. £148 000
3. £160 000
4. £172 000

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 3

1. Not correct
2. Not correct
3. Correct ==> (10,0000 * 1.2) * (£20 * 1.05) ==> £252,000 – FC (80,000 * 1.15)
4. Not correct

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