Question 4: During the FY 2020-21, P Limited has produced 60,000 units operating at 50% capacity level. The cost structure at the 50% level of activity is as under: (RO) Direct Material 300 per unit Direct Wages 100 per unit Variable Overheads 100 per unit Direct Expenses Factory Expenses (25% fixed) Selling and Distribution Exp. (80% variable) 40 per unit Office and Administrative Exp. (100% fixed) 20 per unit The company anticipates that in FY 2021-22, the variable costs will go up by 20% and fixed costs will go up by 15%. 60 per unit 80 per unit The selling price per unit will increase by 10% to RO 880 Required: (i) CALCULATE the budgeted profit/ loss for the FY 2020-21. (ii) company at 50% and 60% level of activity and FIND OUT the profits at respective levels. PREPARE an Expense budget on marginal cost basis for the FY 2021-22 for the
Question 4: During the FY 2020-21, P Limited has produced 60,000 units operating at 50% capacity level. The cost structure at the 50% level of activity is as under: (RO) Direct Material 300 per unit Direct Wages 100 per unit Variable Overheads 100 per unit Direct Expenses Factory Expenses (25% fixed) Selling and Distribution Exp. (80% variable) 40 per unit Office and Administrative Exp. (100% fixed) 20 per unit The company anticipates that in FY 2021-22, the variable costs will go up by 20% and fixed costs will go up by 15%. 60 per unit 80 per unit The selling price per unit will increase by 10% to RO 880 Required: (i) CALCULATE the budgeted profit/ loss for the FY 2020-21. (ii) company at 50% and 60% level of activity and FIND OUT the profits at respective levels. PREPARE an Expense budget on marginal cost basis for the FY 2021-22 for the
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![Question 4: During the FY 2020-21, P Limited has produced 60,000 units operating at 50%
capacity level. The cost structure at the 50% level of activity is as under:
(RO)
Direct Material
300 per unit
Direct Wages
100 per unit
Variable Overheads
100 per unit
Direct Expenses
60 per unit
80 per unit
Selling and Distribution Exp. (80% variable) 40 per unit
Factory Expenses (25% fixed)
Office and Administrative Exp. (100% fixed) 20 per unit
The company anticipates that in FY 2021-22, the variable costs will go up by 20% and fixed
costs will go up by 15%.
The selling price per unit will increase by 10% to RO 880
Required:
(i)
CALCULATE the budgeted profit/ loss for the FY 2020-21.
(ii)
company at 50% and 60% level of activity and FIND OUT the profits at respective levels.
PREPARE an Expense budget on marginal cost basis for the FY 2021-22 for the](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F38a9b509-2d76-4461-8e96-6f6675145467%2F67ecb78b-d3c7-458e-a920-cf84affce591%2Fp9mdx5r_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question 4: During the FY 2020-21, P Limited has produced 60,000 units operating at 50%
capacity level. The cost structure at the 50% level of activity is as under:
(RO)
Direct Material
300 per unit
Direct Wages
100 per unit
Variable Overheads
100 per unit
Direct Expenses
60 per unit
80 per unit
Selling and Distribution Exp. (80% variable) 40 per unit
Factory Expenses (25% fixed)
Office and Administrative Exp. (100% fixed) 20 per unit
The company anticipates that in FY 2021-22, the variable costs will go up by 20% and fixed
costs will go up by 15%.
The selling price per unit will increase by 10% to RO 880
Required:
(i)
CALCULATE the budgeted profit/ loss for the FY 2020-21.
(ii)
company at 50% and 60% level of activity and FIND OUT the profits at respective levels.
PREPARE an Expense budget on marginal cost basis for the FY 2021-22 for the
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