Accounting Multiple Choice Question – 1 September 2022

K Limited is planning an advertising campaign to promote its product.

The campaign will cost £14 000.

This is budgeted to increase sales volume in the second half of the year by 12 %.

Sales for the first half of the accounting year are budgeted at 30 000 units at a contribution of £4.20.

How much additional net profit should be budgeted as a result of the advertising campaign?

Select ONE answer:

1. Nil
2. £400
3. £560
4. £1,120

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 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – (30,000 * 0.12 * £4.2) – £14,000

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