The following are the particulars relating to products P and Q: P Q Selling Price p.u. (₹) 100 120 Marginal cost p.u. (₹) 60 60 Material required p.u. (Kgs.) 5 5 Labour hours p.u. (Hrs.) 4 8 Which product is more profita

CS Executive · Cost and Management Accounting · PYQS · December 2017
The following are the particulars relating to products P and Q: P Q Selling Price p.u. (₹) 100 120 Marginal cost p.u. (₹) 60 60 Material required p.u. (Kgs.) 5 5 Labour hours p.u. (Hrs.) 4 8 Which product is more profitable when : (a) Material is the key factor. (b) Labour hour is the key factor. (c) Sales potential in units is the key factors. (d) Sales potential in rupees is the key factors. Codes: (a) (b) (c) (d)
(A) (Q) (Q) (P) (Q)
(B) (Q) (P) (Q) (Q)
(C) (Q) (Q) (P) (P)
(D) (P) (Q) (P) (Q)

Answer & Explanation:

Correct Answer: Option (B)

Official answer key: (B).

Topics: Marginal Costing

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