Question

1. From the following information, find out the amount of profit earned during the year using marginal costing technique:
Fixed cost - Rs.500000; Variable Cost- Rs. 10 per unit; Selling Price- Rs. 15 per unit; Output level - 150000 units.

Answer 1

Explanation:

Well, you could draw flow chart like for better solving...

Sales = Selling price x Output level.

Sales = 15 x 150000

Sales= 2250000/-

Sales = Variable cost + Contribution

2250000 = 10(150000) + Contribution

Contribution= 7,50,000/-

Contribution = Fixed cost + Profit

750000 = 500000 + Profit.

Therefore profit = 250000/-