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Travis Company has fixed costs of Rs

Accounting

Travis Company has fixed costs of Rs.625,000 per year and variable costs of Rs.7.50 per unit. Its product sells for Rs. 12.50 per unit. Full capacity is 200,000 units:

  1. Compute the contribution per unit
  2. Compute the break-even point in (i) sales amount and (ii) units.
  3. Compute the number of units the company must sell if it wishes to have net income of Rs. 300,000

(Part B)

1.       Following are cost records of product X of SV Ltd., for the year ending 31st March 2019:

Particulars

Amount (Rs.)

Sales (100,000 units)

12,00,000

Raw material (01.04.18)

60,000

Raw material (31.03.19)

43,000

Material purchased

185,000

Freight paid on raw material

8,000

Direct wages

176,000

Factory overheads

122,000

Rent paid

36,000

Office salary

14,000

Selling expenses

67,000

The company has opening inventory of work in progress of Rs. 58,000 and finished goods (20,000 units) of Rs. 200,000.

On 31.03.19, the company has inventory of work in progress worth Rs. 78,000 and finished goods (25,000 units) worth Rs. 276,000.

Prepare the Cost Sheet for year ending 31.03.2019, and determine the profit margin that the company is earning.   

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