Production 5,500 units
Sales 5,000 units@₹ 2.40 per unit
Variable Manufacturing Costs 1.20 per unit
Fixed Manufacturing Costs * 2,860
Selling expenses ₹ 1,300 of which ₹400 is variable. .
From the information given below prepare statement under Absorption Costing and Marginal Costing
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Answer:
Sales = Rs. 400.
Explanation:
PV Ratio = (Sales - Variable Cost) / Sales
0.25 = (Sales - 300) / Sales
0.25 Sales = Sales - 300
Sales - 0.25 Sales = 300
0.75 Sales = 300
Sales = Rs. 400.
Therefore, if a company proposes to introduce a new product in the market. The company wants to maintain P/V Ratio at 25%. If the variable cost of the product is Rs. 300, the selling price will be Rs. 400.
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