Easy Office
Easy Office

cost accounting


22 June 2017 ABC Company has a present level of sales of Rs. 50,00,000. The firm plans to change its credit period and estimates that the change will result
in increased sales of Rs. 5,00,000. Given this information, how much will be the potential addition to profits on account of the enhanced sales
assuming the ratio of variable cost to sales to be 0.85

22 June 2017 Profit will increase by Rs.75000/--

22 June 2017 piz reply with solution


22 June 2017 Increase in sales is 500000. variable cost is 425000(500000*0.85). Cont will be 75000.

So increase in profit is 75000 as no change is there in fixed cost.

22 June 2017 thank you mam

22 June 2017 Welcome. Pleasure is mine



You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join CCI Pro
CAclubindia's WhatsApp Groups Link


Similar Resolved Queries


loading


Unanswered Queries