Page 288 - BA2 Integrated Workbook STUDENT 2018

Fundamentals of Management Accounting

9.2 JKL runs a small taxi company offering transfers to and from the local airport.

It recorded the following data for last seven day period:

Day Number of passengers Miles travelled
Monday 20 25

Tuesday 15 14
Wednesday 8 10

Thursday 5 6
Friday 26 16
Saturday 34 22

Sunday 29 14

The cost of running the service for the week was $8,600.

Calculate the cost per passenger mile for the week. (to the nearest cent).

9.3 CDE has provided the following data for its two divisions for the last period.

Division A ($000) Division B ($000)
Sales revenue 5,000 2,400
Gross profit 3,500 1,200
Profit from operations 1,200 400

Capital employed 7,000 2,300
The divisions have been set the following targets:

ROCE: 19%
Gross profit margin: 45%

Operating profit margin: 20%

Which TWO of the following statements are true?

A Both divisions have exceeded the ROCE target.

B Neither division has met the gross profit margin target.

C Only division A met the operating profit margin target.

D Division B’s ROCE is higher than division A’s.

E Division A’s operating margin is lower than division B’s.

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