Home | ARTS | Accounting For Managers | Additional Illustrations-Marginal Costing

Accounting For Managers - Management Accounting-Marginal Costing

Additional Illustrations-Marginal Costing

   Posted On :  03.05.2018 07:37 am

From the following information, find out the amount of profit earned during the year, using marginal cost equation:

Additional Illustrations
 
 

Illustration 16:

 
 
from the following information, find out the amount of profit earned during the year, using marginal cost equation:
Fixed Cost                                                                                       Rs.5,00,000
 
Variable Cost                                                                                   Rs.10 Per Unit
 
Selling Price                                                                                    Rs.15 Per Unit
 
Output Level                                                                                      1,50,000 Units
Solution:
 

 

Illustration 17:

 
 
Determine the amount of fixed costs from the following details, using the marginal cost equation.

Sales

Rs.2,40,000

Direct Materials

Rs.

80,000

Direct Labour

Rs.

50,000

Variable Overheads

Rs.

20,000

Profit

Rs.

50,000

 
Solution:
 
 

Illustration 18:

 
 
Sales 10,000 Units @ Rs.25 Per Unit
 
Variable Cost Rs.15 Per Unit
 
Fixed Costs Rs.1,00,000
 
Find Out The Sales For Earning A Profit Of Rs.50,000
Solution:
 
 
Sales To Earn A Profit Of Rs.50,000


Illustration 19:

 
 
The records of ram ltd., Which has three departments give the following figures:

The management wants to discontinue product c immediately as it gives the maximum loss. How would you advise the management?
 
Solution:
 

Here department A gives negative contribution, and as such it can be given up. Department C gives a contribution of Rs.5,000. If department C is closed, then it may lead to further loss. Therefore, C should be continued.

 

Tags : Accounting For Managers - Management Accounting-Marginal Costing
Last 30 days 9 views

OTHER SUGEST TOPIC