Question 1

**Section B - Case 1: AeroDrone Tech**

AeroDrone Tech is an agricultural technology startup developing the 'AgriScout', a drone designed to monitor crop health. Market research indicates that large-scale farms would be willing to pay $1,200 for such a drone. AeroDrone's investors require a profit margin of 20% on the selling price. The current estimated production cost of the AgriScout is $1,050.

Calculate the target cost for the AgriScout drone. (Enter your answer as a whole number, without the $ sign)

Accepted Answer

Target Cost = Expected Selling Price - Desired Profit Margin.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Calculating the margin on cost instead of selling price (e.g., dividing by 1.2).

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA PM — Performance Management Practice Exam 6

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