A company sold 56000 units of its single product in a period for a total revenue of $700,000.
Finished Inventory increased by 4000 units in the period. Cost in the period were:
variable production $3.60 per unit
Fixed production $258,000 (absorbed on the actual number of units produced)
Fixed non production $144,000
What is the absorption costing profit?
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Absorption Costing
Question 2
E operates a marginal costing system. For the forthcoming year, variable costs are budgeted to be 60% of sales value and fixed costs are budgeted to be 10% of sales value.
If E increases its selling prices by 10%, but if fixed costs, variable costs per unit and sales volume remain unchanged, the effect on E's contribution would be:
a. decrease of 2%
b. an increase of 5%
c. an increase of 10%
d. an increase of 25%
11y ago#2I am happy to help with problems, but presumably whatever book you found these question in also has the answers!
Please tell me what problem you are having and I will then try and help, but do not just set me questions to answer.
Sir can u pls answer the second question.. I seriously dont know how to do it?
can u help me pls???
11y ago#4Suppose sales were $100.
Then variable costs would be $60 and contribution would be $40.
If selling prices go up by 10% then they go to $110. Variable costs do not change and therefore contribution would be $50.
Increase in contribution is 10/40 = 25%
thnk U sir
11y ago#6You are welcome :-)
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