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Cost Management-final                                                                                                       27

2.Statement of variable  cost per unit



Year2005-062006-07

Rs.Rs.



Direct  materials1617.60

(Rs. 16 + 10% X Rs. 16)

Direct  wages4037.50

(Rs. 40 X 100/112 X 105/100)

Variable  overheads1212.60

(Rs. 12 + 5% X  Rs. 12)



Variable  cost  per  unit  68  67.70



3.Contribution per  unit  during 1999 -2000

=Selling price  per unit – Variable  cost  p.u.

=Rs. 125 – Rs. 67.70 = Rs. 57.30

4.Profit   in 1998-1999

Contribution per unit     =S.P  (p.u.)  -- V.C.  (p.u.)

                         =Rs. 125 – Rs. 68 = Rs. 57 p.u.

Total contribution =Rs. 11,40,000

20,000 units X Rs. 57/- p.u.

Less: Fixed  expenses 6,75,000

        

Profit 4,65,000

(a)Income  Statement for the  year  1999-2000

Rs.

Sales revenue25,00,000

20,000 units X Rs. 125

Less:  Variable  cost13,54,000

20,000 units X Rs. 67.70

(Refer  to working note 2)



Total  contribution11,46,000

Less : Fixed  expenses8,00,000

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