Can you please help me with part B Question 1Collins Technical College teaches its accountancy subjects wholly through correspondence.This is done by the development and production of self-study packs which enables studentsto prepare for professional qualifications.Each course of study was sold at the price of £40.00 last year and a total of 28,000 wereproduced and sold. The production costs of the various courses offered by the college arethe same.The variable cost of producing a study course last year was:£14.0016.001.251.00Direct MaterialsDirect LabourOther direct costs (mainly postage)Variable overheadsThe fixed overhead for the college during the year was £60,000.During the coming year the costs of the organisation are expected to increase by the following:%(b)Direct MaterialsDirect labourOther DirectsVariable OverheadsFixed OverheadsMarket research has shown that when the company increases the price of its courses to itsstudents, as long as the increase is kept below 17.5% this is unlikely to have an effect on thenumber of courses sold. However, for every 1% prices are raised above a 17.5% increase,the number of units sold can be expected to fall by 2%.Required:(a)(c)20.0018.0067.0032.006.00Calculate the selling price of the study courses if the number of study courses soldand the annual profits are to remain as before.Calculate the number of units that the organisation would have to sell if it did notchange the price charged but maintained the profit level attained in the previous year.Give an analysis of a situation where, when prices are changed the number of unitssold is affected. The data provided in the above must be used to illustrate youranswer.

Pricing decisions are very crucial for any Business Entity as these decisions directly affect the…

Answered: (b) Calculate the number of units that…

(b) Calculate the number of units that the organisation would have to sell if it did not change the price charged but maintained the profit level attained in the previous year.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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