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ACC 4

# ACC 4

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07/20/2011

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ASSIGNMENT NO. 4MANAGERS OF ACCOUNTANTS
TOPIC -Marginal costing, CVP analysis & pricing decisions
SUBMITTED TO
MRS. MANU KALIA

SUBMITTED BY
GOUSIA AMINROLL NO.B54REG NO. 11006403

1.A manufacturing Company’s director budgeted the following data forthe coming year:Sales (1, 00,000 units) --3, 00, 00Variable costs ----1, 20,000Fixed costs ---- 1, 50,000a) Find out the P/V ratio, break-even points & margin of safetyb) Evaluate the effect of:i) 10% increase in physical sales volume.ii) 10% decrease in physical sales volume.iii) 50% increase in variable costs.iv) 5% decrease in variable costs.v) 10% increase in fixed costs.vi) 10% decrease in fixed costs.vii) Rs 15,000 variable cost decrease accompanied by Rs 45,000 fixedcost increase
.
Solution 1.
Sales = 300000

Less
variable cost =120000Contribution=180000
Less
fixed cost =150000
Profit = 30000a)
PV Ratio =contribution/sales *100=180000/300000*100=60%Breakeven point (for sales) = Total fixed cost/contribution*sales=150000/180000*300000=Rs. 249999Or Breakeven sales = total fixed cost/ PV Ratio=150000/60%=Rs. 250000Margin of safety = actual sales – break even sales=300000 – 250000= Rs. 50000
b)Increase Decrease
Sales (10%) 330000 270000Variable cost (50% &5%) 180000 114000