2 Marginal Cost

COST ACCOUNTING – TYBAF SEM VI MARGINAL COSTING
TOPIC NO. 02 - MARGINAL COSTING– BREAK EVEN “I”

PRACTICAL PROBLEMS
TYPE I – BASIC PROBLEMS ON MARGINAL

COSTING
Q1)
Total Fixed Cost ₹.12,000
Selling Price 12per unit
Variable Cost 9 per unit
Calculate break even point.
Q2) Sales ₹. 2, 00,000, profit ₹. 20,000, Variable cost 70%.on sales, find out
a) PV Ratio
b) Fixed cost
c) Sales to earn profit ₹. 80,000
Q3)
Sales 1,00,000
Fixed Cost 20,000
Variable Cost 60,000
From the above information calculate the PV Ratio and BEP.
Q4) Ascertain profit of SATISH Chemicals When

Sales ₹. 2, 00,000
Fixed cost ₹. 40,000
BEP ₹. 1, 60,000
Q5) Ascertain sales of X Ltd. When

Fixed Cost ₹. 20,000
Profit ₹. 10,000
BEP ₹. 40,000
Q6) Following information is available in respect of G Ltd. and D Ltd.

Particulars G Ltd. (₹.) D Ltd. (₹.)
Sales 11,00,000 14,00,000
Variable Cost 8,80,000 10,50,000
Profit 1,20,000 2,00,000
Calculate:
i) P/v Ratio of both Companies
ii) Fixed Cost of both Companies
iii) Break Even Point of both Companies
iv) Sales to earn Profit of ₹. 2,10,000 by each company
v) Margin of safety
Q7) The following is the cost structure of a product. Selling price ₹. 100 per unit.
Variable Cost per unit
Satish Sukhramani Sir PAGE 1

Material ₹. 38
Labour ₹. 14
Direct Expenses ₹. 8
Fixed Overheads for the year

Factory Overheads ₹. 2,80,000
Office Overheads ₹. 2,20,000
No. of units produced and sold 40,000 Units
Calculate:
1. P/V Ratio. 2. Break Even Point in Units
3. Margin of Safety Amount 4. Break Even Point if fixed overheads increased by
20%
5. Revised P/v ratio when selling price increased by 20%
TYPE II - INFORMATION OF 2 DIFFERENT YEAR

Q8) The sales turnover and profit during two years were as follows:
Year Sales ₹. Profits ₹.
2009 1,50,000 20,000
2010 1,70,000 25,000
You are required to calculate:
1. PV Ratio 2. Variable costs of the two periods.
3. Fixed Cost 4. Break-even Point
5. The sales required to earn a profit of ₹. 40,000. 6. Margin of safety at a profit of ₹. 50,000.
7. The profit made when sales are ₹.2,50,000
Q9) From the following information, Calculate:

i) P/V Ratio ii) Fixed Cost
iii) Break Even Sales iv) Profit at sales of ₹. 24,00,000.
Particulars 31-03-2014 (₹.) 31-03-2015 (₹.)
Sales 18,00,000 21,00,000
Profit 1,20,000 1,80,000
Q10) The following data have been extracted from the books of Alfa Ltd.
Year Sales (₹.) Profit (₹.)
2008 5,00,000 50,000
2009 7,50,000 1,00,000
You are required to calculate:
a) P/V Ratio, b) Fixed Cost,
c) Break-Even Sales d) Profit on Sales of ₹. 4,00,000
e) Sales to earn a profit of ₹. 1,25,000.
Q11) From the following particulars you are required to calculate: - TYBCOM MARCH 2003
1. Profit Volume Ratio 2. Break Even Point
3. Profit when sales is ₹.2, 00,000 4. Sales when profit is ₹.40, 000
5. Margin of safety
Year Sales ₹. Profit ₹.
I 2,40,000 18,000
II 2,80,000 26,000
You may assume that the cost structure and selling price remain constant in two years.
Q12) Following data have been extracted from the books of Sukhramani ltd.
Year Sales (₹.) Profit (₹.)
2002 5,00,000 50,000
2003 7,50,000 1,00,000
You are required to calculate — TYBCOM MARCH 2004
i) P / V Ratio ii) Fixed Cost
iii) Break even sales iv) Profit on sales of ₹.4, 00,000
v) Sales to earn a profit of ₹. 1, 25,000.
TYPE III – MIXED LEVEL

Q13) The following relates to the company manufacturing the varied range of products.
Total Sales ₹. Total Cost ₹.
Year Ended 31.12.1980 22,23,000 19,83,600
Year Ended 31.12.1981 24,51,000 21,43,200
Assuming stability in prices, with variable cost carefully controlled to reflect predetermined
relationships, and an unvarying figure for fixed costs.
Calculate:
a) P/V ratio to reflect the rates of growth for profit and sales
b) Fixed cost
c) Fixed cost percentage to sales
d) Break-even point
e) Margin of safety for the years 1980 & 1981.
Q14) You are given the following information for the next year. (M.COM Exam)
Sales- (10,000 units) ₹. 1,20,000
Variable Cost ₹. 48,000
Fixed Cost ₹. 60,000
1) Find out the P/V ratio, Break-even point and the margin of safety.
2) Evaluate the effect of the following on P/V ratio, Break – even point and the margin of safety.
a) 10% increase in Variable Cost.
d) 10% decreases in Fixed Cost.
f) 10% decrease in Physical Sales Volume.
g) 5% increase in selling price.
Q15) From the following data, calculate -

1. Breakeven point expressed in amount of sales in rupees.
2. Number of units that must be sold to earn a profit of ₹.60, 000 per year.
3. How many units must be sold to earn a net income of 10% of sales?
Sales Price ₹. 20 per unit
Variable Manufacturing costs 11 per unit
Variable Selling costs 3 per unit
Fixed factory overheads 5, 40,000 per year
Fixed Selling costs 2, 52,000 per year
TO SUCCEED IN YOUR MISSION, YOU MUST HAVE
SINGLE-MINDED DEVOTION TO YOUR GOAL. - A. P. J.
ABDUL KALAM

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COST ACCOUNTING – TYBAF SEM VI MARGINAL COSTING

TOPIC NO. 02 - MARGINAL COSTING– BREAK EVEN “I”

TYPE I – BASIC PROBLEMS ON MARGINAL

Q4) Ascertain profit of SATISH Chemicals When

Q5) Ascertain sales of X Ltd. When

Q6) Following information is available in respect of G Ltd. and D Ltd.

Satish Sukhramani Sir PAGE 1

Fixed Overheads for the year

No. of units produced and sold 40,000 Units

TYPE II - INFORMATION OF 2 DIFFERENT YEAR

Q9) From the following information, Calculate:

TYPE III – MIXED LEVEL

Q15) From the following data, calculate -

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