For a given product, selling price per unit is ₹15, variable cost per unit is ₹10, total fixed cost is ₹1,50,000 and units sold during the period are 35,000. The margin of safety is —
CS Executive · Cost and Management Accounting · PYQS · December 2014
For a given product, selling price per unit is ₹15, variable cost per unit is ₹10, total fixed cost is ₹1,50,000 and units sold during the period are 35,000. The margin of safety is —
Answer & Explanation:
Correct Answer: Option (B)
Correct answer: (B) ₹75,000. Break-even quantity = 1,50,000/(15−10) = 30,000 units. Margin of safety = (35,000−30,000)×15 = 75,000.
Topics: Marginal Costing
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