Accounting Multiple Choice Question – 3 April 2023

The details of a planned college course are shown below.

• course fee per student – £100
• variable course cost per student – £20
• total fixed costs of the course – £480

The budgeted number of students is 10.

However, if a lower fee is charged 20 students would take the course.

What is the maximum reduction on the current course fee of £100, to earn the same total profit from either 10 or 20 students?

Select ONE answer:

1. £16
2. £24
3. £40
4. £50

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 students * £100 = £1,000 – (£20 * 10) – £480 = £320 profit vs 20 students * £60 = £1,200 – (£20 * 200) – £480 = £320 profit
4. Not correct

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