Question 1

Section B - Case 1: AeroYield

AeroYield is a technology startup developing specialized drones for the agriculture sector to monitor crop health. The company is preparing to launch its new model, the 'AgriScout'. Market research indicates that customers are willing to pay $8,000 for the AgriScout. AeroYield's investors require a profit margin of 25% on the selling price.

The current estimated production cost for the AgriScout is $6,400 per unit.

Calculate the target cost gap for the AgriScout drone. (Enter the number only).

Accepted Answer

Target Cost Gap = Current Estimated Cost - Target Cost. (Target cost was calculated as $6,000).

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Subtracting the target cost from the selling price instead of the estimated cost.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA PM — Performance Management Practice Exam 1

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