COST ACCOUNTING
COST VOLUME PROFIT ANALYSIS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Clariton Company is planning to sell 100, 000 units of Product Q for RM12 per unit. The fixed cost are RM280, 000. In order to realize a profit of RM200, 000, what would be the variable costs?
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RM 480, 000
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RM 720, 000
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RM 900, 000
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RM 920, 000
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Explanation:
Detailed explanation-1: -Calculation of M.O.S-M.O.S.= Actual Sales – B.E.P. Sales = 100000-60000= ₹40, 0000 OR M.O.S. = Profit = 20000 X 100 = ₹40, 000 P/V 50 Calculation of profit on the basis of M.O.S. – M.O.S.
Detailed explanation-2: -Fixed cost = Total cost of production-(Variable cost per unit x number of units produced)
Detailed explanation-3: -The key CVP formula is as follows: profit = revenue – costs. Of course, to be able to apply this formula, you need to know how to work out your revenue: (retail price x number of units). Plus, you need to know how to work out your costs: fixed costs + (unit variable cost x number of units).
There is 1 question to complete.