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Been given 3 percentages, need to work out the original/missing value?

Production costs = ?

Marketing costs = 30 % of Production Costs
Distribution costs = 50 % of Production Costs
Sales costs = 20% of Production Costs.

What are the production costs then? (No numerical value given, just the %s.)
Are you being asked for the production costs in absolute terms? They want an answer expressed as £X?

If you have no absolute values whatsoever (i.e. for any of the costs for which you've got percentages) and you haven't got any other absolute values (e.g. total costs) then the production costs in absolute terms cannot be established.

Are you sure there's no other information available, either in the question itself or in any associated material?
Reply 2
Ive attached a screenshot of the question in its entirety.
That's useful, thanks. The pie chart is attempting to show what proportion of the total costs (i.e. production costs + marketing costs + distribution costs + sales commissions) are attributable to each of those component costs. The fact that the pie chart is expressed in percentage terms gives that away.

As most of the costs are defined relative to the production costs, let's assign a random value of £100 to those costs (doing so just makes things easier, in my view). If the production costs were £100, then the marketing costs would be £30 (i.e. 30% of £100), the distribution costs would be £50 (i.e. 50% of £100) and the sales commissions would be £20 (i.e. 20% of £100). The total costs (i.e. for all four component costs - the whole pie) is therefore £100 + £30 + £50 + £20 = £200. Agreed? So, what proportion of the total pie chart (i.e. of £200) do the production costs (which we assigned a arbitrary value of £100) represent?

My assumption is that as you manipulate that chart (to change the size of the blue production section), the others will automatically resize. But they might not; you might need to resize those too.
Reply 4
Original post by DataVenia
That's useful, thanks. The pie chart is attempting to show what proportion of the total costs (i.e. production costs + marketing costs + distribution costs + sales commissions) are attributable to each of those component costs. The fact that the pie chart is expressed in percentage terms gives that away.

As most of the costs are defined relative to the production costs, let's assign a random value of £100 to those costs (doing so just makes things easier, in my view). If the production costs were £100, then the marketing costs would be £30 (i.e. 30% of £100), the distribution costs would be £50 (i.e. 50% of £100) and the sales commissions would be £20 (i.e. 20% of £100). The total costs (i.e. for all four component costs - the whole pie) is therefore £100 + £30 + £50 + £20 = £200. Agreed? So, what proportion of the total pie chart (i.e. of £200) do the production costs (which we assigned a arbitrary value of £100) represent?

My assumption is that as you manipulate that chart (to change the size of the blue production section), the others will automatically resize. But they might not; you might need to resize those too.

Yes that is correct, the others automatically resize. Based on your example of £100, I would say 50%. But I am not sure how I would calculate this myself. Just insert arbitrary figure?
Original post by ironuhlan
But I am not sure how I would calculate this myself. Just insert arbitrary figure?

That's what I would do. You could pick £1, £100, or £100,000 - it doesn't make any difference to the percentage. You can do it without using an arbitrary value if you prefer, and just consider the production costs to be X. So you have X + (30% of X) + (50% of X) + (20% of X) = 2X. What proportion of 2X is X? 50%. I just think using an arbitrary value is easier.

Actually, now that I think about it, the question might be wanting something else. It's asking you to "Adjust the pie chart to represent the product costs". Marketing costs, distribution and sales costs are not product costs - only production is a product cost. So maybe it wants you to edit the pie so that the blue area (production) represents the whole pie. The question could be testing that you know what the term "product costs" means, rather than testing that you know how to use simple percentages. That's why, in the real world, pie charts have titles - so you know what they're trying to represent! (There isn't a title cropped off the bottom, I assume?)

I think my first approach is probably the one they're looking for, but it could be either. Sorry for the lack of clarity!
Reply 6
Sorry, after your reply post, I actually experimented with random numbers and yep, every damn time....its always the same constant value 50%. Thank you so much

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