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    Marginal Costing

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    jayesh_r01
    Company A and B sell the same product under the same management. Their budgeted profit and loss accounts for 2008 show sales of Rs. 300000 for both, variable costs of Rs. 240000 for A and Rs. 200000 for B, and fixed costs of Rs. 30000 for A and Rs. 70000 for B. The question asks to calculate the breakeven point and margin of safety for each company, the sales needed for Rs. 10000 profit, and which company will earn greater profits under heavy or low demand conditions.

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    Marginal Costing

    Uploaded by

    jayesh_r01
    2 views1 page
    Company A and B sell the same product under the same management. Their budgeted profit and loss accounts for 2008 show sales of Rs. 300000 for both, variable costs of Rs. 240000 for A and Rs. 200000 for B, and fixed costs of Rs. 30000 for A and Rs. 70000 for B. The question asks to calculate the breakeven point and margin of safety for each company, the sales needed for Rs. 10000 profit, and which company will earn greater profits under heavy or low demand conditions.

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    Company A and B sell the same product under the same management. Their budgeted profit and loss accounts for 2008 show sales of Rs. 300000 for both, variable costs of Rs. 240000 for A and Rs. 200000 for B, and fixed costs of Rs. 30000 for A and Rs. 70000 for B. The question asks to calculate the breakeven point and margin of safety for each company, the sales needed for Rs. 10000 profit, and which company will earn greater profits under heavy or low demand conditions.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    2 views1 page

    Marginal Costing

    Uploaded by

    jayesh_r01
    Company A and B sell the same product under the same management. Their budgeted profit and loss accounts for 2008 show sales of Rs. 300000 for both, variable costs of Rs. 240000 for A and Rs. 200000 for B, and fixed costs of Rs. 30000 for A and Rs. 70000 for B. The question asks to calculate the breakeven point and margin of safety for each company, the sales needed for Rs. 10000 profit, and which company will earn greater profits under heavy or low demand conditions.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 1

    1.

    The companies A and B both under the same management make and sell the same type of
    product. Their budgeted profit and loss account for the year ending 2008 are as follows:

    A B

    Sales Rs. 300000 Rs 300000


    Less:
    Vriable Cost Rs. 240000 Rs 200000
    Fixed Cost Rs. 30000 Rs. 270000 Rs 70000 Rs 270000
    --------------- --------------
    Rs 30000 Rs 30000

    You are required to:

    a) Calculate the breakeven point for each company and margin of safety.
    b) Calculate the sales volume at which each of the two companies will make a profit of Rs. 10000
    c) State which company is likely to earn greater profits in condition of:
    a. Heavy demand for the product
    b. Low demand of the product

    Ans.

    ¿ cost
    Breakeven sales=
    PV Ratio

    Contribution
    PV Ratio= ∗100
    Sales

    Hai re… maine ye question pura solve hi nahi kiya tha.. 

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