Total semi fixed unit (Rs) 60,000 12 1,20,000 11 1,80,000 10 2,40,000 9 3,00,000 8 3,60,000 7 cost (Rs) 7. A company's flexible budget reveals the following market conditions and costs: Output in units Selling price per Total variable cost (Rs) Total fixed cost (Rs) 1,50,000 4,18,000 1,42,000 1,50,000 8,18,000 1,42,000 1,70,000 12,78,000 1,42,000 1,70,000 15,78,000 1,42,000 2,00,000 17,78,000 1,42,000 2,00,000 19,02,000 1,42,000 a) Prepare a schedule showing the total Differential Cost and Incremental Revenue. b) At what level, should the company set its level of production? c) What selling price should be established in order to obtain the most profitable operations for the years?

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter7: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 42E: Sales Revenue Approach, Variable Cost Ratio, Contribution Margin Ratio Arberg Companys controller...
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Total semi fixed
unit (Rs)
60,000
12
1,20,000
11
1,80,000
10
2,40,000
9
3,00,000
8
3,60,000
7
cost (Rs)
7. A company's flexible budget reveals the following market conditions and costs:
Output in
units
Selling price per
Total variable
cost (Rs)
Total fixed cost
(Rs)
1,50,000
4,18,000
1,42,000
1,50,000
8,18,000
1,42,000
1,70,000
12,78,000
1,42,000
1,70,000
15,78,000
1,42,000
2,00,000
17,78,000
1,42,000
2,00,000
19,02,000
1,42,000
a) Prepare a schedule showing the total Differential Cost and Incremental Revenue.
b) At what level, should the company set its level of production?
c) What selling price should be established in order to obtain the most profitable operations for the
years?
Transcribed Image Text:Total semi fixed unit (Rs) 60,000 12 1,20,000 11 1,80,000 10 2,40,000 9 3,00,000 8 3,60,000 7 cost (Rs) 7. A company's flexible budget reveals the following market conditions and costs: Output in units Selling price per Total variable cost (Rs) Total fixed cost (Rs) 1,50,000 4,18,000 1,42,000 1,50,000 8,18,000 1,42,000 1,70,000 12,78,000 1,42,000 1,70,000 15,78,000 1,42,000 2,00,000 17,78,000 1,42,000 2,00,000 19,02,000 1,42,000 a) Prepare a schedule showing the total Differential Cost and Incremental Revenue. b) At what level, should the company set its level of production? c) What selling price should be established in order to obtain the most profitable operations for the years?
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