Dear John or somebody else
I have my F2 exam this Thursday 24/11/16.
I have a question on budgeted profit.
This is from an exam paper from my tuition provider:
Q Co. has the following budgeted information available:
Cost/unit
Direct Material $24
Direct Labour $28
Variable overhead $19
Fixed overheads are expected to be $500000. The following inventory information is also
available:
Units
Opening inventory 4,800
Production 48,000
Sales 50,000
Using a marginal costing system, what is the budgeted profit if selling price per unit is
$115?
It says in the solutions that the answer is $1,700,000.
I am not sure how to work this out.
Can someone help me please on short notice. I would really appreciate it. Thanks :).
Jegan
ACCA Forums
MAbudgeted profit using a marginal costing system
9y ago#1If you want me to answer then you must ask in the Ask the Tutor Forum - this forum is for students to help each other (so another student may well give you the answer :-) )
sale Revenue (50000*115) = 5750000
open Inventory (4800*71) = 340800
variable production cost (48000*71) = 3408000
closing Inventory (2800*71) = 198800
Variable cost of sale ( 340800+3408000-198800) = 3550000
Contribution ( 5750000-3550000) = 2200000
Fixed cost 500000
Profit (2200000-500000 ) = 1700000
Thank you Rashad :)
welcome
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