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E. Business organizations experience various types of costs and it is very important to analyze costs for business decision making. i] Marginal cost is a
E. Business organizations experience various types of costs and it is very important to analyze costs for business decision making. i] \"Marginal cost\" is a very important cost concept in business decision making. Explain briefly the meaning of Marginal cost. Why Marginal cost is considered as very important in business decision making? 1|What are the main criteria that need to take in to account in determining whether a cost is relevant for business decision making? {5 marks] ii} Diamond PLC has been in the business of manufacturing and sales of the floor tile \"STYLISH". The following cost structure of the tile \"STYLISH "produced by the company is available for your information. Fts. Material 50 Direct labor 40 Variable Overhead it: Other costs incurred by Diamond PLC are as follows. Factory fixed overhead 2Mn Selling and distribution fixed overhead 5 Mn Fixed administration overhead 3 Mn Selling price of a unit of STYLISH is Fts.25ID. During the year 21322 the company budgeted to produce and sell 5013,0130 units. You are required to compute, a] Breakeven point in units and value ['2 marks) b] Number of units to be sold to earn prot of Rs.2 Mn. {2 marks} c] Margin of safety {2 Marks) d] If selling and distribution fixed costs are increased by Rs. 1,000,060 and material cost are also increased by 10% while the selling price is reduced by Rs.5, compute the number of units to be produced and sold to earn the currently budgeted profit by the company. {3 marks]
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