Model 1: Marginal costing (contribution) and P/ V ratio. (Determination of contribution and P/ V ratio and comparability of profit—Based on the results, decisions are to be taken.
From the following data, compute contribution and P/ V ratio and comment on the profitability of products:
Particulars |
X Rs. |
Y Rs. |
Materials/unit |
500 |
400 |
Wages/unit |
200 |
300 |
Fixed overheads/units |
700 |
200 |
Variable overheads/units |
200 |
400 |
Sales per unit |
2,000 |
2,000 |
Output per month |
300 units |
200 units |