Question 1

**Section A**

NeuroTech is a startup developing a new brain-computer interface headset. The estimated selling price is $850. The company requires a profit margin of 30% on the selling price. The current estimated cost to produce one headset is $640.

What is the target cost gap per headset? (Enter your answer as a whole number, without the $ sign).

Accepted Answer

1. Calculate the required profit: 30% of $850. 2. Calculate the target cost: Selling Price - Required Profit. 3. Calculate the cost gap: Estimated Cost - Target Cost.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Calculating the 30% margin on the cost instead of the selling price.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA PM — Performance Management Practice Exam 2

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