In suggested answers of
may 2011 Paper 3 costing FM QUESTION No. 3 on working capital
How they have calculated export sales ?
Thanks in advance
regards
RAHUL
7 Replies
ashish gupta
( student)
(1922 Points)
Replied 07 September 2011
they have rightly calculated the cash cost of export sales.
lets present it in some different manner. export sale price is 10% less than domestic sale price. that means if domestic selling price is 100 than export price is 90.
so if we convert the export sales into domestic price the figure would be
(1080000/90)*100 = 1200000
and we deduct 20 % margin from this then cost of export sales comes to
1200000*80% = 960000
Rahul
(Chartered Accountnat CS)
(1580 Points)
Replied 07 September 2011
WHY ARE WE TRYING TO CONVERT EXPORT SALES TO DOMESTIC SALEES
ashish gupta
( student)
(1922 Points)
Replied 07 September 2011
we are not converting export sale into domestic sales. we just try to find out the gross margin % on export sale so that we can calculate the cost of export sale. so as per the given question linking is necessary between domestic sale and export sale to find out the cost of export sale
Aditya
(CA final)
(82 Points)
Replied 09 September 2011
but why r we doing this sum on cash cost basis.i mean it is nowhere mentioned in the question??
Rahul
(Chartered Accountnat CS)
(1580 Points)
Replied 11 September 2011
U may solve on total basis also.
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