Day: May 23, 2022

A company’s budget shows figures for costs and sales for the month ended 31 March 2022.

• selling price per unit – £35
• variable costs per unit – £20
• fixed costs – £10,000
• volume sold – 2,000 units

In March the actual sales volume was 10% lower than budgeted.

By how much was actual profit lower than budgeted profit?

Select ONE answer:

1. £2,000
2. £3,000
3. £5,700
4. £7,000

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 – CM = £35 – £20 = £15 * 2,000 units – £10,000 FC = £20,000 Profit ==> £15 * 1,800 units – £10,000 FC = £17,000 profit —-> £3,000 lower actual profit
3. Not correct
4. Not correct

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