Marginal Costing Quiz

Contribution = $Sales - Variable Cost$ Break Even Point (Units) = $\frac{Fixed Cost}{Contribution \text{ per unit}}$ Break Even Point (Value) = $\frac{Fixed Cost \times Sales}{Sales - Variable Cost}$ Profit-Volume Ratio (P/V Ratio) = $\frac{Sales - Variable Cost}{Sales} \times 100$

Additional sales required to break even = Calculate the difference between current sales and break-even sales Breakeven in units and in sales value = Calculate using the given output, selling price, variable cost, and fixed cost P/V ratio, Fixed Cost, Sales Value to earn a profit = Calculate the P/V ratio, fixed cost, and sales value to earn a specified profit using the given information Margin of Safety with changed P/V ratio = Calculate the margin of safety when the P/V ratio is changed Break-even point and turnover for specified profit = Calculate the break-even point and turnover required to earn a specified profit using the given information

Contribution = Sales revenue minus variable costs Break Even Point = Level of sales at which total revenue equals total costs, resulting in neither profit nor loss Margin of Safety = Excess of actual sales over the break-even sales P/V Ratio = Percentage representing the contribution to sales ratio

<p>$Contribution = Sales - Variable Cost$ = Calculation of contribution from sales and variable costs $Break Even Point (Units) = \frac{Fixed Cost}{Contribution \text{ per unit}}$ = Formula to calculate break-even point in units $Break Even Point (Value) = \frac{Fixed Cost \times Sales}{Sales - Variable Cost}$ = Formula to calculate break-even point in value $Profit-Volume Ratio (P/V Ratio) = \frac{Sales - Variable Cost}{Sales} \times 100$ = Formula to calculate profit-volume ratio</p> Signup and view all the answers

<p>Determine additional sales for breakeven = Given information about sales, fixed cost, and variable cost to calculate additional sales needed to break even Calculate breakeven in units and sales value = Provided with output, selling price, variable cost, and fixed cost to determine breakeven point Compute P/V ratio, fixed cost, and sales value for specified profit = Given sales, profits, and variable cost percentage to calculate P/V ratio, fixed cost, and sales value for a specific profit Find margin of safety with changed P/V ratio = Given contribution, fixed cost, and original P/V ratio to find margin of safety when the P/V ratio is altered Calculate break-even point and turnover for specified profit = Provided with contribution, fixed cost, and desired profit to determine break-even point and turnover required for a specified profit</p> Signup and view all the answers

<p>To calculate the additional sales required to break even, we can use the formula: Additional sales = (Fixed Cost + Profit) / P/V Ratio. First, we need to calculate the Contribution, which is Sales - Variable Cost. Then we can find the P/V Ratio using Contribution / Sales. Finally, the additional sales required to break even can be calculated using the formula: Additional sales = (Fixed Cost + Profit) / P/V Ratio.</p> Signup and view all the answers

<p>i) P/V ratio can be calculated using the formula: P/V Ratio = (Contribution / Sales) * 100. ii) Fixed Cost can be calculated using the formula: Fixed Cost = (Sales - Variable Cost) - Profit. iii) Sales Value to earn a profit of Rs.80,000 can be calculated using the formula: Sales = (Fixed Cost + Desired Profits) / (1 - Variable Cost / Sales).</p> Signup and view all the answers

<p>To determine the breakeven in units and in sales value, we can use the formulas:</p> <ol> <li>Breakeven Point (Units) = Fixed Cost / Contribution per unit</li> <li>Breakeven Point (Value) = Fixed Cost / P/V Ratio. First, we need to calculate the Contribution per unit, which is Selling price per unit - Variable Cost per unit. Then we can find the P/V Ratio using Contribution / Sales. Finally, the breakeven in units and in sales value can be calculated using the above formulas.</li> </ol> Signup and view all the answers

<p>First, calculate the current Margin of Safety using the formula: Margin of Safety = (Actual Sales - Breakeven Sales) / Actual Sales. Then, find the new Contribution by multiplying the current Contribution by the new P/V ratio. Finally, calculate the new Margin of Safety using the formula: New Margin of Safety = (Actual Sales - New Breakeven Sales) / Actual Sales.</p> Signup and view all the answers

<p>The breakeven point can be calculated using the formula: Breakeven Point (Value) = Fixed Cost / (1 - Variable Cost / Sales). The turnover required to earn a profit of Rs. X can be calculated using the formula: Turnover = (Fixed Cost + Desired Profits) / (1 - Variable Cost / Sales).</p> Signup and view all the answers