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Assignment 2

The document provides cost information for a company called East India Company that currently operates at 50% capacity and produces 10,000 units. It states that at 60% capacity, raw material costs increase by 2% and selling price falls by 2%, and at 80% capacity raw material costs increase by 5% and selling price falls by 5%. It also breaks down the unit cost of Rs. 180 at 50% capacity among material, wage, factory overhead and administrative overhead costs. It asks to prepare a marginal cost statement estimating profits at 60% and 80% capacity.

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Mohit Kumar
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5 views

Assignment 2

The document provides cost information for a company called East India Company that currently operates at 50% capacity and produces 10,000 units. It states that at 60% capacity, raw material costs increase by 2% and selling price falls by 2%, and at 80% capacity raw material costs increase by 5% and selling price falls by 5%. It also breaks down the unit cost of Rs. 180 at 50% capacity among material, wage, factory overhead and administrative overhead costs. It asks to prepare a marginal cost statement estimating profits at 60% and 80% capacity.

Uploaded by

Mohit Kumar
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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COST ACCOUNTING(BBA-III SEM.) ASSIGNMENT-2(Marginal Costing) M.M.=10MARKS Ques.

East India Company is currently working at 50% capacity and produces 10000 units. At 60% working, raw material cost increases by 2% and selling price falls by 2%. At 80% working, raw material cost increases by 5% and selling price falls by 5%. At 50% capacity working, the product costs Rs. 180/unit and is sold at Rs.200/unit. The unit cost of Rs 180 is made up as follows: Materials=Rs 100 Wages=Rs 30 Factory Overheads=-Rs 30(40% fixed) Administrative Overheads=Rs20(50% fixed) Prepare a marginal cost statement showing the estimated profits of the business when it is operating at 60% and 80% capacity.

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