This document provides study material and solved assignments on Costing. It covers topics such as breakeven point, net profit, contribution ratio, and more.
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Running Head: COSTING1 COSTING
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COSTING3 PAGE 1 Rat evolumeTotal Sales24280000$6,720,000 Less: Variable Costs12$3,360,000 Less: Handling cost2$560,000 Contribution10$2,800,000 Less: Fixed costs$420,000 Net Profit$2,380,000 Breakeven point Fixed cost42000 Contribution per unit 1. The breakeven point in units is 42000 units. 2. Increase in units sales volume by 15% RatevolumeTotal Sales24322000$7,728,000 Less: Variable Costs12$3,864,000 Less: Handling cost2$644,000 Contribution10$3,220,000 Less: Fixed costs$420,000 Net Profit$2,800,000 The net income of the company is $2800000 3. Targeted net income2380000 Net purchase price2.4 Fixed costs+targeted income2422000 Contribution per unit9.6 Volume of sales dollar required252292
COSTING4 4 Current contribution ratio42% Selling price for the coming yearP-14.4 Sellingpriceforthecurrent year34.56 Page 4 PAGE 4MountaineeringTouringTouring Selling Price141129129 Variable cost per unit83.783.780.27 Contribution per unit57.345.348.73 Fixed costs590400502200 Breakeven point (units) Fixed Costs103041030448.7 Contribution per unit The variable cost shall be shifted from 83.7 to 80.27 to achieve the same breakeven units as Mountaineering model Page 7 PAGE 7 ParticularsModel no. 6754Model no. 4399 Selling Price6969 Less: Variable costs1912.8 Add: commission6.96.9 25.919.7 Contribution43.149.3 Annual Fixed Costs9865001114400 Breakeven point2288922604 The company must sell 22889 units if model 6754 is selected.
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COSTING5 Page 8 PAGE 8 Model no. 6754Model no. 4399 Sales$3,312,000$3,312,000 Less: Commission$331,200$331,200 Variable costs$912,000$614,400 $1,243,200$945,600 Total Contribution$2,068,800$2,366,400 Fixed Costs$986,500$1,114,400 Net Income$1,082,300$1,252,000 2A The net income of both the models is $ 1082300 and $1252000 2B The more profitable model would be Model 4399 due to the income at 1252000 Page 9 PAGE 9 Equipment depreciation Cost of equipment450000 Useful Life5 Depreciation90000 Contribution margin per unit49.3 Required units to be sold (fixed Costs+Desired Income)2172400 Units required to be sold44064.91 3.Therequiressaleunitsare44065 approximately
COSTING6 PAGE 10 The point of difference will be where the profits of both the models will be equal Let Z be the volume of point of indifference FIXED COSTS Profit for model 675450 $ 985,600.00 Profit for model 439956.2 $ 1,114,400.00 6.2 $ 128,800.00 Units at which both the models will be equal20774