CA Intermediate · Cost and Management Accounting · Marginal Costing
Sundaram Appliances sells two products. Product A: selling price Rs 100, variable cost Rs 60, sales mix 3 units. Product B: selling price Rs 200, variable cost Rs 150, sales mix 1 unit. Fixed costs are Rs 4,50,000. Sales mix stays constant. How many units of Product A will be sold at the break-even point?
The question data do not reconcile cleanly, so no listed option is reliably correct.
- A15,000 units
- B4,500 units
- C13,500 unitsCorrect
- D9,000 units
Explanation
Per mix of 3A + 1B: contribution = 3 x 40 + 1 x 50 = Rs 170. Break-even mixes = 4,50,000 / 170 = 2,647.06, which is not clean, so recheck data: A contribution 100-60 = 40, giving 120 for 3 units; B 200-150 = 50; total 170. Break-even units are not whole mixes under this data, so the intended answer cannot be derived.
Did you get it right without looking?
One question tells you little. A timed set on Marginal Costing shows your real accuracy, how long you take and where you lose marks.
More Marginal Costing questions
- Rohan Plastics sells a product at ₹80 per unit. Variable cost is ₹52 per unit and fixed cost is ₹2,10,000 per period. What is the break-even…
- Kaveri Appliances reports sales of ₹8,00,000, with a P/V ratio of 40%. Its fixed costs are ₹2,00,000. Management plans to cut the selling pr…
- Ravi Auto Components makes a part with selling price ₹80, variable cost ₹50 and fixed costs ₹3,00,000. Its margin of safety is 40% of actual…
- Sundaram Foods Ltd makes two products, A and B. A sells at Rs 80 with variable cost Rs 50 and B sells at Rs 100 with variable cost Rs 70. Sa…
- Meenakshi Industries makes products X and Y. X sells at Rs 80 with variable cost Rs 50; Y sells at Rs 100 with variable cost Rs 60. Fixed co…
- Sundaram Plastics sells a product at ₹50 per unit. Variable cost is ₹30 per unit and fixed costs are ₹2,40,000 a year. What sales quantity i…