[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-267910-105":59,"doc-detail-267910-en":130},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":123,"head_meta":125,"extra_data":127,"updated_unix":129},105,"en","performance-management-marchjune-2018-sample-answers-section-c-31-portable-garage-co","Performance Management March/June 2018 Sample Answers - Section C - 31 Portable Garage Co","","Performance Management March/June 2018 sample answers for Section C, focusing on internal transfer pricing and profit planning. The document analyzes Portable Garage Co by constructing contribution and profit figures for Divisions A, B, and PGC Co, then evaluates optimal internal vs external sales decisions using incremental contribution and opportunity cost logic. It also solves The Alka Hotel questions on breakeven occupancy, margin of safety, Q1 operating impact, project C/S ratios, viability under capacity limits, and how fixed and variable cost changes shift breakeven and expected profit.",{"@graph":69,"@context":122},[70,84,105],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":20,"@type":76,"position":81},"https://docshare.wps.com/document/exam/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/performance-management-marchjune-2018-sample-answers-section-c-31-portable-garage-co/267910/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/performance-management-marchjune-2018-sample-answers-section-c-31-portable-garage-co/267910.png","ImageObject",300,407,{"name":92,"@type":93},"Sophia Brooks","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-27","2026-09-14",true,{"@type":102,"interactionType":103,"userInteractionCount":34},"InteractionCounter",{"@type":104},"ViewAction",{"@type":106,"mainEntity":107},"FAQPage",[108,114,118],{"name":109,"@type":110,"acceptedAnswer":111},"How is the profit statement for Portable Garage Co’s divisions structured in the sample answers?","Question",{"text":112,"@type":113},"The document presents sales revenue (external and internal transferred), separates variable costs (external materials, internal transferred costs, labour, other external costs), then derives contribution and subtracts fixed costs to reach profit for each division.","Answer",{"name":115,"@type":110,"acceptedAnswer":116},"What transfer pricing logic is applied when Division B can buy adaptors externally?",{"text":117,"@type":113},"The sample compares group incremental cost for Division B buying externally against the contribution forfeited when Division A sells fewer units externally. It concludes that Division A should satisfy external customers first before making internal sales, because the external sale contribution loss exceeds the incremental external cost for the group.",{"name":119,"@type":110,"acceptedAnswer":120},"How does The Alka Hotel determine breakeven occupancy and assess Q1 closure?",{"text":121,"@type":113},"Breakeven occupancy is calculated as fixed cost divided by contribution per room nights. Q1 closure is rejected because fixed costs still incur, and closing would eliminate contribution that otherwise supports annual profit, also risking customer loss and perceived unreliability.","https://schema.org",{"og:url":83,"og:type":124,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":126,"canonical":83},"index,follow",{"doc_id":128,"site_id":62},267910,1789997617,{"code":4,"msg":5,"data":131},{"doc_id":128,"user_id":132,"nickname":92,"user_avatar":133,"doc_module":4,"category_id":19,"category_name":20,"doc_title":65,"doc_description":67,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":34,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":34,"language":139,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":140,"faqs":141,"seo_title":142,"seo_description":67,"update_tm":143,"read_time":144},962084925636,"https://ap-avatar.wpscdn.com/davatar_994ba38a5ba835b3df7d355c54d3ed8d","Answers  \nFundamentals Level – Skills Module, Paper F5  \nPerformance Management March/June 2018 Sample Answers  \nSection C  \n31  \nPortable Garage Co  \n(a) Profit statement for current position:  \nSales revenue:  \nExternal sales (150,000 x $180/200,000 x $15) Internal transferred sales (150,000 x $13)  \nTotal revenue  \nVariable costs:  \nExternal material costs  \nInternal transferred costs  \nLabour costs  \nOther costs of external sales  \nTotal variable costs  \nContribution  \nLess fixed costs  \nProfit  \nDivision B $’000  \n27,000  \n\n| 27,000 |\n| --- |\n| 6,750\u003Cbr>1,950\u003Cbr>5,250 |\n| 13,950 |\n| 13,050\u003Cbr>5,460 |\n| 7,590 |\n\nDivision A $’000  \n3,000  \n1,950  \n\n| 4,950 |\n| --- |\n| 1,050\u003Cbr>1,400\u003Cbr>200 |\n| 2,650 |\n| 2,300\u003Cbr>2,200 |\n| 100 |\n\nPGC Co $’000  \n30,000  \n\n| 30,000 |\n| --- |\n| 7,800\u003Cbr>6,650\u003Cbr>200 |\n| 14,650 |\n| 15,350\u003Cbr>7,660 |\n| 7,690 |\n\n(b) If Division B can buy adaptors from outside the group at $13 per unit, then the optimum position is for Division A to sell as many adaptors as possible to external customers at $15 each and then sell the remainder to Division B at a price to be agreed between them.  \nThis would mean that Division A continues to sell Division B 150,000 adaptors but Division B then buys the remaining  \n30,000 adaptors from an external supplier. This is because the contribution per unit for Division A’s external sales is $7 ($15 – $3 – $4 – $1) . This means that for every external sale it loses, it forfeits $7 for the group. However, the incremental cost for the group of Division B buying adaptors from outside the group is only $6 ($13 external cost less the $7 cost of making them in-house) . So, it makes sense for Division A to satisfy its external sales first before selling internally.  \n(c) In order for Division A to supply Division B with 180,000 adaptors, it would have to reduce its external sales from 200,000 units to 170,000 . This is because it only has enough spare capacity to supply Division B with 150,000 units at present after it has supplied adaptors to its external customers.  \nThe minimum transfer price in situations where there is no spare capacity is marginal cost plus opportunity cost. In this case, contribution is lost by not selling 30,000 units to the external customers. As the marginal cost for Division A’s internal sales is $7 ($4 + $3) and the contribution per unit for external sales is $7 per unit ($15 – $3 – $4 – $1), the transfer price for the additional 30,000 units would need to be $14.  \n32 The Alka Hotel  \n(a) Breakeven point (in occupied room nights) = Fixed cost/contribution per room $600,000/($180 – $60) = 5,000 occupied room nights  \nMargin of safety = (Budgeted room occupancy – breakeven room occupancy)/budgeted room occupancy  \nTotal rooms available per annum: 365 days x 25 rooms = 9,125 rooms  \nBudgeted occupancy level: 9,125 x 70% = 6,387·5 rooms  \nMargin of safety: (6,387·5 – 5,000)/6,387·5 = 21·72%  \n(b) Profit or loss for Q1  \n$  \nContribution (900 rooms x $120)  \nFixed costs (($600,000/12) x 3) Loss  \n108,000 (150,000)  \n(42,000)  \nThe Alka Hotel should not close in Q1 . The fixed costs will still be incurred and closure would result in lost contribution of $108,000 . This in turn would result in a decrease in annual profits of $108,000 . In addition, the hotel could lose customers at other times of the year, particularly their regular business customers, who may perceive the hotel as being unreliable.  \n(c) Contribution/sales ratio of Project 1  \n$  \nSales value of two room nights (2 x $67·50) 135  \nSales value of a pair of theatre tickets  100  \n235  \nVariable cost of two room nights (2 x $60) (120)  \nVariable cost of a pair of theatre tickets  (95)  \nContribution  20  \nC/S ratio (20/235) 8·51%  \nBreakeven point in revenue ($20,000/0·0851) $235,000  \nAlternatively:  \nContribution per theatre package sold $20  \nBreakeven point in theatre packages ($20,000/$20) 1,000  \nBreakeven point in revenue (1,000 x $235) $235,000  \nThe unit contribution per theatre package ","cbCaiaNFR8kZRVm0","https://ap.wps.com/l/cbCaiaNFR8kZRVm0","pdf",114138,"English","# Section C\n## 31 Portable Garage Co\n## 32 The Alka Hotel\n## Performance Management March/June 2018 Sample Marking Scheme","[{\"question\":\"How is the profit statement for Portable Garage Co’s divisions structured in the sample answers?\",\"answer\":\"The document presents sales revenue (external and internal transferred), separates variable costs (external materials, internal transferred costs, labour, other external costs), then derives contribution and subtracts fixed costs to reach profit for each division.\"},{\"question\":\"What transfer pricing logic is applied when Division B can buy adaptors externally?\",\"answer\":\"The sample compares group incremental cost for Division B buying externally against the contribution forfeited when Division A sells fewer units externally. It concludes that Division A should satisfy external customers first before making internal sales, because the external sale contribution loss exceeds the incremental external cost for the group.\"},{\"question\":\"How does The Alka Hotel determine breakeven occupancy and assess Q1 closure?\",\"answer\":\"Breakeven occupancy is calculated as fixed cost divided by contribution per room nights. Q1 closure is rejected because fixed costs still incur, and closing would eliminate contribution that otherwise supports annual profit, also risking customer loss and perceived unreliability.\"}]","Performance Management March/June 2018 Sample Answers - Section C - 31 Portable Garage Co | PDF",1789426488,18]