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Forums › FIA Forums › MA1 Management Information Forums › JOB COSTING
Direct mterial .3000
Direct labor…4000
production ov/h 50% of prime cost
non production ov/h 25%of total production cost.
profit margin 30%
calculate change in profit if zoobi co. decides to consider profit as 30% of total cost(markup)?
my ans is 16875.5 decrease
but correct is 3281 increased
plz solve it….
@sanjananandvani said:
Direct mterial .3000
Direct labor…4000
production ov/h 50% of prime cost
non production ov/h 25%of total production cost.
profit margin 30%
calculate change in profit if zoobi co. decides to consider profit as 30% of total cost(markup)?my ans is 16875.5 decrease
but correct is 3281 increased
plz solve it….
please do this favour..i really need your help..
Hello Everyone it is too simple LOOK!
D.M=3000
D.L=4000
=7000 PRIME COST
PRODUCTION OVERHEADS ARE 0.50% OF PRIME COST SO DO
7000*0.50=3500
3500
7000
=10500 PRODUCTION COST
NON-MANUFACTURING COST IS 0.25% OF TOTAL COST SO DO
10500*0.25=2625
2625+10500=13123
THIS {13123} IS COST
SO PROFIT IS 0.30% OF COST NOW
13123*0.30/130={{{{{{{{3028}}}}}}}}
The previous post is incorrect:
Prime cost = 3000 + 4000 = 7000
Add 50%, so 7000 x 1.5 = 10,500
Add 25%, 20 10,500 x.1.25 = 13125.
Current profits: 30% profit margin ie profits are 30% of sales, so the ratios are:
Cost + Profit = Selling price
70 30 100
13125
So profit is 13125 x 30/70 = 5,625
Under the 30% mark-up (ie profit is 30% of cost) the ratios are:
Cost + Profit = Selling price
100 30 130
Profit would be 13,125 x 30% = 3,937.5
Profits would decrease by 5,625 – 3,937.5 = 1,687.5
Model answer is incorrect.