Question 4: During the FY 2020-21, P Limited has produced 60,000 units operating at 50% capacity level. The cost structure at the 50% level of activity is as under: (RO) Direct Material 300 per unit Direct Wages 100 per unit Variable Overheads 100 per unit Direct Expenses Factory Expenses (25% fixed) Selling and Distribution Exp. (80% variable) 40 per unit Office and Administrative Exp. (100% fixed) 20 per unit The company anticipates that in FY 2021-22, the variable costs will go up by 20% and fixed costs will go up by 15%. 60 per unit 80 per unit The selling price per unit will increase by 10% to RO 880 Required: (i) CALCULATE the budgeted profit/ loss for the FY 2020-21. (ii) company at 50% and 60% level of activity and FIND OUT the profits at respective levels. PREPARE an Expense budget on marginal cost basis for the FY 2021-22 for the

Question 4: During the FY 2020-21, P Limited has produced 60,000 units operating at 50% capacity level. The cost structure at the 50% level of activity is as under: (RO) Direct Material 300 per unit Direct Wages 100 per unit Variable Overheads 100 per unit Direct Expenses Factory Expenses (25% fixed) Selling and Distribution Exp. (80% variable) 40 per unit Office and Administrative Exp. (100% fixed) 20 per unit The company anticipates that in FY 2021-22, the variable costs will go up by 20% and fixed costs will go up by 15%. 60 per unit 80 per unit The selling price per unit will increase by 10% to RO 880 Required: (i) CALCULATE the budgeted profit/ loss for the FY 2020-21. (ii) company at 50% and 60% level of activity and FIND OUT the profits at respective levels. PREPARE an Expense budget on marginal cost basis for the FY 2021-22 for the

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter11: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11.2.7P

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