Q.

Given production is 1,00,000 units, fixed costs is Rs 2,00,000 Selling price is Rs 10 per unit and variable cost is Rs 6 per unit. Determine profit using technique of marginal costing.

A. Rs 2, 00,000
B. Rs 8, 00,000
C. Rs 6, 00,000
D. None of the above
Answer» A. Rs 2, 00,000
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Sushant Rajagopalan
1 year ago

Q: Can you explain how to calculate profit using marginal costing in this scenario?
1

Najma Siraj
1 day ago

Here,I’m trying to explain from the base.
First calculate the sales .
100000 is the production, and selling price per unit is 10.
So Total sales = production *SP
=100000*10=1,000,000.
Contribution=Sales-VC
10-6=4.
BEP. =FC*SALES/CONTRIBUTION
200000*10/4=500,000.
PV RATIO=FC/BEP*100
=200000/500000*100=40 %.
Now calculate profit.
PROFIT = SALES*PV RATIO-FC
=1000000*40%-200000=200,000.
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