If Fixed cost = Rs. 2,50,000;
Variable cost = Rs. 10 per unit
Selling price = Rs. 15 per unit and
Production level = 75,000 units
Calculate profit earned by using marginal costing technique
A. Rs. 1,25,000
B. Rs. 1,50,000
C. Rs. 2,50,000
D. Rs. 3,75,000
Answer: Option A
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FORMAT OF FINDING PROFIT WITH THE HELP OF MARGINAL COST TECHNIQUE IS:-
SALES (75,000 * 15) = 11,25,000
LESS: VARIABLE COST (75,000 * 10) = (750,000)
CONTRIBUTION MARGING = 375,000
LESS: FIXED COST = (250,000)
NET PROFIT = 125,000
SO, THE ANSWER OF A IS RIGHT.