Marginal Costing Answer[1]

Cost is the total of expense incurred the production something Costing is the process to determine cost of production for control cost Objective of cost accounting 1- To calculating the cost of production 2- To minimize the cost of production 3- To fix the selling price of production 4- To control the cost 5- To find normal and abnormal loss Method of costing 1- Job costing: applied with specific finished product is required within given time Ex: Repair shops, plumping car repairing 2 - Contracting job applied with the building and construction Ex: building house road and bridge 3 - Parts costing applied with physical parts and components for manufacturer assembly Ex: P.C and Car assembly 4 – Process costing applied with process factory and industries Ex: food cans, petrochemical and metal industries 1. • • • •

Break even Point ( Units) = F/ Unit contribution = 4000/6= 6,67 units BEP(value)= F X S/ C = 4000 X 10,000/6000 = 6,667 BD MOS (units)= Actual Sales unit- BE sales unit = 1000 – 667 = 3,33 units MOS ( Value) = Actual Sales value- BE sales value = 10,000 – 6,667 = 3,333 BD

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Break even Point ( Units) = F/ Unit contribution = 6000/8= 7,50 units BEP(value)= F X S/ C = 6,000 X40,000 / 16,000 = 15,000 BD MOS (units)= Actual Sales unit- BE sales unit = 2000- 750 = 1,250 units MOS ( Value) = Actual Sales value- BE sales value = 40,000 –15,000= 25,000BD

2.

3. Profit = Contribution – Fixed cost C= S – V = 20,000 – 8,000 = 12,000 Profit (at 1,000 units) = C- F = 12,000 – 9,000 = 3,000 BD Profit (at 1,500 units ) = New C- New F New C= 1500 x 20 – 1500 x 8 = 30,000 – 12,000 = 18,000 New Profit = 18,000 – 9,000 = 9,000 BD