Accounting Multiple Choice Question – 24 August 2023

Alex plc sells two products, X and Y.

• sales (units) of X was 1,000 & Y was 2,000
• selling price per unit of X was £22 & Y was £12
• contribution per unit of X was £12 & Y was £4

Which would increase the company’s profit by £10,000?

Select ONE answer:

1. a 30% increase in the sales of X
2. a 50 % increase in the sales of both products
3. an increase in the selling price of X by £1 and Y by £6
4. a reduction in the variable costs of both products by £5

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 – current profit 1,000 units of X * £12 + 2,000 units of Y * £8 = £20,000. To increase profit by £10,000 then extra 50% of X & Y = £10,000
3. Not correct
4. Not correct

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