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Marginal Costing

(See attached file for full problem description)

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Direct Material and Direct labour are variable costs.
Overheads are 40% variable and 60% fixed

Orange Ltd intention was to produce and sell the followig quantities during the year ended 31 May 2005.

Product Quantity
(units)
Platinum 2000
Gold 1800
Silver 1600
Bronze 2400

Required
a. A statement in marginal costing format of profitability for each product and in total.

It was then discovered that fixed overhead were likely to rise by 8% and the totalamount available
to pay overheads could not be increased.

Required
b A statement taking into account the possibility of the increase in fixed overheads and maximising
profit, showing the quantity of each product to be produced.

C A Statement in marginal costing format of profitability for each product and in total based on yours
answer to (b)
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(See attached file for full problem description)

Attachments

Solution Summary

The solution explains how to do marginal costing for Orange Ltd

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