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Q.NO.11
A Ltd makes and sells a single product. The trading results for year 2007 ate given below:
(Rs. Thousands)
Sales 3,000
Material 900
Labour 600
Overheads 900
Total cost 2400
High and low method is used by the company to estimate overhead expenditure.
You are required to:
(i) Prepare a statement showing the estimated trading results for 2008.
(ii) Calculate the Breakeven points for 2007 and 2008.
(iii) Comment on the BEPs and profits for the years 2007 and 2008.
(CA FINAL May 2008)
Answer
Working note :
Let VO in 2006 = X Let FO i