Sir john plz help me out. My cb exam is on my door step its is on 1st week of november. I have few Q. Will you plz tell me how to solve them.
Q1) A company operates a standard marginal costing. Last month its actual fixed overhead expenditure was 10% above budget resulting in a fixed overhead expenditure variance of $36000. What was the actual expenditure on fixed overheads last month?
Q2) A company wishes to make profit of 150,000. It has a fixed cost of 75000 with a C/S ratio of 0.75 and a selling price of 10 per unit.
How many units would the company need to sell in order to achieve the required level of profit?
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Questions of Costing
12y ago#11) If budget expenditure was X, then the variance is 10% X or 0.1X
So 0.1X = 36000
So X = 360000
This is budget expenditure. Actual is 10% higher and so actual is $396,000
2) To make a profit of 150,000, the total contribution needs to be 225,000.
The contribution per unit is 0.75 x $10 = $7.50
So the number of units needed to be sold = 225,000 / 7.50 = 30,000 units
Thank You so much sir.
But i have confusions. What does this C/S ratios means? I got problems in solving the Q consisting of this type of ratios data. Kindly explain me about it. Why you have multiplyd 0.75 with 10. What is the formula of it. Please SIR respond me as quickly as possible. and wish me luck for this.
Thank You so much sir.
But i have confusions. What does this C/S ratios means? I got problems in solving the Q consisting of this type of ratios data. Kindly explain me about it. Why you have multiplyd 0.75 with 10. What is the formula of it. Please SIR respond me as quickly as possible. and wish me luck for this. Anxiously waiting for your reply.
Shehvar.
12y ago#4The CS ratio = contribution per unit / selling price per unit.
So contribution = CS ratio x selling price
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