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Shanco plc has managed to reduce its transport costs from £0.7 million in 2019 to £0.6 million in 2020 - OCR - GCSE Business - Question 3 - 2021 - Paper 1

Question 3

Shanco plc has managed to reduce its transport costs from £0.7 million in 2019 to £0.6 million in 2020. What percentage reduction in transport costs has Shanco plc ... show full transcript

Worked Solution & Example Answer:Shanco plc has managed to reduce its transport costs from £0.7 million in 2019 to £0.6 million in 2020 - OCR - GCSE Business - Question 3 - 2021 - Paper 1

Step 1

Calculate the Reduction in Transport Costs

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Answer

The reduction in transport costs can be calculated as follows:

Reduction = Initial Cost - Final Cost Reduction = £0.7 million - £0.6 million = £0.1 million

Step 2

Calculate the Percentage Reduction

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Answer

To find the percentage reduction, use the formula:

[ ext{Percentage Reduction} = \left( \frac{\text{Reduction}}{\text{Initial Cost}} \right) \times 100 % ]

Substituting the values:

[ ext{Percentage Reduction} = \left( \frac{£0.1 \text{ million}}{£0.7 \text{ million}} \right) \times 100 % = \left( \frac{0.1}{0.7} \right) \times 100 % \approx 14.29% ]

Step 3

Choose the Closest Answer

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Answer

Rounding 14.29% to one decimal place gives approximately 14.3%. Thus, the correct answer is C) 14.3%.

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