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Marginal Costing

Chapter 4 focuses on marginal costing problems, including calculations for profit, profit-volume ratio, break-even point, and margin of safety based on provided financial data. It presents various scenarios involving fixed and variable costs, sales figures, and desired profit levels. The chapter emphasizes practical applications of marginal costing techniques in decision-making for businesses.

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Ankan Biswas
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9 views3 pages

Marginal Costing

Chapter 4 focuses on marginal costing problems, including calculations for profit, profit-volume ratio, break-even point, and margin of safety based on provided financial data. It presents various scenarios involving fixed and variable costs, sales figures, and desired profit levels. The chapter emphasizes practical applications of marginal costing techniques in decision-making for businesses.

Uploaded by

Ankan Biswas
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Chapter- 4

Marginal Costing
Problems
1.Find out the amount of profit earned during the year using marginal costing technique based on
the below given information.

Fixed Cost:6,00,000 Variable Cost: 10 per unit

Selling Price: ₹15 per unit Output Level: 1,50,000 units.

2. What is the Profit-Volume (P/V) Ratio if sales are ₹16,00,000, variable costs are ₹6,00,000, and
fixed costs are ₹3,00,000?

3. Given the following figures, Calculate the Break-Even Point (BEP):

Fixed Expenses ₹ 1,20,000, Variable Cost per unit 10, Selling Price per unit 16

4. If the Selling Cost is 12 per unit, Total Fixed Cost is 12,000, and Variable Cost is 9 per unit,
Calculate the Profit-Volume (P/V) Ratio, Break-Even Point (BEP) in Units and Value.

5. Given the following data:

Total Fixed Cost: 12,000, Selling Cost: 12 per unit Variable Cost: ₹ 9 per unit.

What will be the Profit When sales are (a) ₹60,000 and (b) ₹1,00,000,

What will be the amount of sales if it is desired to earn profit of (a) ₹6,000 and (b) ₹15,000.

6. The following data are available from the records of the company
Sales ₹80,000, Variable Cost 30,000; Fixed Cost 15,000

Calculate-

• PV ratio, BEP and Margin of Safety.


• Calculate the effect of 10% increase in sale price
• Calculate the effect of 10% decrease in sale price
7. The following data are available from the records of the company

Sales ₹60,000; Variable Cost 30,000; Fixed Cost 15,000

Calculate-

• PV ratio, BEP and Margin of Safety at this level


• Calculate the effect of 10% increase in sale price
• Calculate the effect of 10% decrease in sale price.
8. The following information related to production and sales of an article for January and February
2020.

Particular January (₹) February (₹)


Sales 38,000 65,000
Profit --- 3,000
Loss 2,400 ---
Calculate PV Ratio, Fixed Cost, BEP, Profit or Loss at 46,000 Sales and Sales to earn a profit of₹
5,000.

9. The following costs and sales of a manufacturing company for the first half and second half of
2019-2020 is given:

Particular I Half II Half


Sales 24,00,000 30,00,000
Total Cost 21,80,000 26,00,000
Find P/V Ratio of the firm, Annual Fixed Costs, BEP, and MOS as percentage of sales.
10. Lucky buckets sold 14,000 buckets and 18,000 buckets at ₹50 per bucket in two consecutive
years. The company incurred a loss of 10,000 in first and earned a profit of ₹10,000 in the second
year. Find out amount of Fixed Cost, BEP in Units and Sales required to earn a profit of ₹35,000.

Particular I year II year


Sales (14,000 *50) =7,00,000 (18,000 *50) = 9,00,000
Loss 10,000 ---
Profit ---- 10,000

11. Calculate P/V Ratio, Break Even Sales with the help of P/V ratio and Sales required to earn a
profit of 4,50,000.

Given Information:

Fixed Expenses: ₹90,000, Selling Price per Unit: 12.

Variable Cost per Unit:


Direct Material: 5 Direct Labour: 2

Direct Overhead 100% of Direct Labour. (100% of 2) = 2

12. Given Information:


Selling Price per Unit: ₹45

Variable Manufacturing Cost per Unit: 25

Variable Selling Cost per Unit: 5 Fixed Factory Overhead: ₹1, 50,000

Fixed Selling Cost: ₹30,000

Calculate:

(1) BEP (in units) and Sales

(2) No. of units that must be sold to earn a profit of ₹1,00,000 per year

(3) How many units are to be sold to earn a net income of 15% of sale?

13. Given Information:

Total Sales: ₹3,60,000 Selling Price per Unit: 100

Variable Cost per Unit: ₹50 Fixed Cost: 1,00,000

Calculate:

(1) P/V Ratio, BEP and Margin of Safety.

(2) If the selling price is reduced to 90 by how much is MOS reduced?


(3) What should be the sales to earn a profit of 2,50,000?

14. Assuming the Cost Structure and Selling Prices, from the following data.

Year Sales Profit


I 1,20,000 9,000
II 1,40,000 13,000
Calculate P/V Ratio, Fixed Cost, BEP for Sales, Profit when Sales are 1,50,000, Sales require
Profit of 50,000 and MOS when Profit 80,000.

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