ITPEC IP April 2021 Question 72

Source exam: ITPEC IP April 2021Topic: Corporate Activities

ITPEC IP April 2021 — Question 72 of 100

The actual profit is 77% of the planned profit. Actual revenue is 1,350 × 1,100 = 1,485,000 yen. Actual purchase cost is 1,000 × 1,100 = 1,100,000 yen, so actual profit is 385,000 yen. The ratio is 385,000 ÷ 500,000 × 100 = 77%.

Answer (a)

Why not others:
- multiplying the individual sales and quantity percentages does not by itself give profit performance

- profit must subtract total purchase cost from total sales revenue before comparison

Key rule: Calculate planned and actual profit separately using revenue minus cost, then divide actual profit by planned profit.

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