AACE International CCP Exam - Topic 5 Question 36 Discussion

Actual exam question for AACE International's CCP exam

Question #: 36
Topic #: 5

As the leas cost engineer for the XYZ Services Company, you have been requested to provide pertinent for an equipment rental decision. The unit price of the food stuffs varies, but an average unit selling process has been determined to be $0.50 cents and the average unit acquisition cost is $0.40 cents.

The following revenue and expense relationships are predicted:

It S480 is the target net profit, then the total sales volume (in dollars) is:

A$30,000

B$37,500

C$34,400

D$32,400

Show Suggested Answer

Suggested Answer: B

To calculate the total sales volume needed to achieve a target net profit of $480, we first find the total required contribution margin:

RequiredContributionMargin=FixedCosts+TargetNetProfit=6,000+480=6,480text{Required Contribution Margin} = text{Fixed Costs} + text{Target Net Profit} = 6,000 + 480 = 6,480RequiredContributionMargin=FixedCosts+TargetNetProfit=6,000+480=6,480

Using the contribution margin per unit of $0.10, we calculate the required sales volume:

RequiredSalesUnits=6,4800.10=64,800unitstext{Required Sales Units} = frac{6,480}{0.10} = 64,800 text{ units}RequiredSalesUnits=0.106,480=64,800units

Then, multiply by the unit sale price:

TotalSalesVolume=64,8000.50=$32,400text{Total Sales Volume} = 64,800 times 0.50 = $32,400TotalSalesVolume=64,8000.50=$32,400

Therefore, $32,400 is the required sales volume to achieve a target net profit of $480.

by Luther at Jan 05, 2026, 05:16 AM

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Earlean

5 days ago

C) $34,400 seems reasonable based on the costs.

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Adelaide

10 days ago

I feel like A) $30,000 is too low.

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Leonor

16 days ago

I think it's B) $37,500.

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Azzie

21 days ago

This question is tricky.

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Kerry

26 days ago

I disagree, it seems like $30,000 is too low for the target profit.

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Portia

1 month ago

Definitely leaning towards option B, $37,500.

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Timmy

1 month ago

Wait, how do we know those profit predictions are accurate?

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Michal

1 month ago

I think the total sales volume should be around $34,400.

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Tiara

2 months ago

The average unit selling price is $0.50.

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Shawna

2 months ago

Haha, "easy peasy lemon squeezy"? Really, Brinda? Anyway, B) $37,500 is the correct answer.

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Brinda

2 months ago

B) $37,500 is the way to go. Easy peasy lemon squeezy!

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Tamekia

3 months ago

Hmm, this seems straightforward enough. I'll go with B) $37,500.

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Kris

3 months ago

I agree with Avery, the math checks out. B) $37,500 is the right answer.

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Avery

3 months ago

The correct answer is B) $37,500. The target net profit is $480, and the average unit selling price is $0.50 and the average unit acquisition cost is $0.40, so the total sales volume should be $37,500.

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Dean

3 months ago

I feel like the answer might be around $34,400, but I’m not completely confident in my calculations.

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Ula

3 months ago

If I remember correctly, we need to consider both the selling price and acquisition cost to find the contribution margin first.

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Merilyn

3 months ago

I think we practiced a similar question where we had to find total sales volume, but I can't recall the specific steps we took.

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Fannie

4 months ago

I remember we discussed how to calculate total sales volume based on profit targets, but I'm not sure about the exact formula to use here.

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Marge

4 months ago

Alright, time to put my problem-solving skills to the test. I'll work through this step-by-step and double-check my work to make sure I get the right answer.

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Allene

4 months ago

This seems straightforward enough. I'll start by calculating the contribution margin per unit, then use that to determine the total sales volume needed to reach the target profit.

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Katie

4 months ago

I'm a bit confused by the revenue and expense relationships they've provided. I'll need to make sure I understand how those factors into the overall calculation.

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Aleta

4 months ago

Okay, let's see. They're asking for the total sales volume to achieve a target net profit of $480. I think I need to set up an equation and solve for the sales volume.

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Mignon

5 months ago

Hmm, this looks like a classic cost-volume-profit analysis problem. I'll need to think through the relationships between revenue, expenses, and profit to solve this.

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Deandrea

2 hours ago

I think we need to calculate the contribution margin first.

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