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