Cost statement showing the estimated profit of the business

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Reference no: EM131041523

Batty & Co. is currently working at 50% capacity & produces 10,000 units. At 60% working raw material cost increases by 2% & selling price falls by 2%. At 80% working raw material cost increases by 5% & selling price falls by 5%.

At 50% capacity working the product costs Rs.180 per unit & is sold at Rs.200 per unit. The unit cost of Rs.180 is made up as follows:
Material Rs.100
Wages Rs.30
Factory Overheads Rs.30 (40% fixed)
Administration Overheads Rs.20 (50% fixed)

Question: Prepare a marginal cost statement showing the estimated profit of the business when it is operated at 60% & 80% capacity. Also calculate break-even points at these levels.

Reference no: EM131041523

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