Accounting 9706 · AS & A Level · Costs and cost behaviour

Costs and cost behaviour — practice question

A company predicts that, in July, its sales volume will be 10\% lower and its contribution per unit will be 5\% lower than in June. During June, it produced and sold $50000$ units. The total contribution amounted to $80000$. Its fixed costs were $2000$ and they remained the same in July. What is the decrease in its profit in July compared with June?

  • A$4000
  • B$8000
  • C$11600
  • D$13600

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