Question: E plc operates a marginal costing system. For the forthcoming year, variable costs are budgeted to be 60 per cent of sales value and fixed

E plc operates a marginal costing system. For the forthcoming year, variable costs are budgeted to be 60 per cent of sales value and fixed costs are budgeted to be 10 per cent of sales value. If E plc increases its selling prices by 10 per cent, but if fixed costs, variable costs per unit and sales volume remain unchanged, identify the effect on E plc's contribution:

a. A decrease of 2 per cent.b. An increase of 5 per cent.c. An increase of 10 per cent.d. An increase of 25 per cent.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Exam question 1 E pic operates a marginal costing system. For the forthcoming year, variable costs are budgeted to be 60 per cent of sales value and fixed costs are budgeted to be 10 per cent of...

E plc operates a marginal costing system. For the forthcoming year, variable costs are budgeted to be 60% of sales value and fixed costs are budgeted to be 10% of sales value. If E plc increases its...

Intermediate E pic operates a marginal costing system. For the forthcoming year, variable costs are budgeted to be 60% of sales value and fixed costs are budgeted to be 10% of sales value. If E pic...

2) Gooch plc operates a marginal costing system. For the upcoming year, variable costs are budgeted to be 60% of sales value and fixed costs are budgeted to be 10% of sales value. If the company...

For the forthcoming year, variable costs are budgeted to be 60% of sales value and fixed costs to be 10% of sales value. If the selling price increases by 10% and fixed 38 Exam Practice Kit:...

dont bother about what i sent please answe this new question i just attached Teddy pl. manufactures and sells motorised bicycle quent Occasionally it buys in a product rather than produce it if it is...

1. The managerial accountant at Coastal Edge Manufacturing reported the following data: Month New wa thit to account for Beginning werk in New Started in action during Now Total physical for Totalt...

Management of Freeport Auto Limited wants improve its production process by minimising wastes. The entity currently operates a marginal costing system when preparing its operating budget. The entity...

QUESTION ONE (20 Marks) INFORMATION Busta Limited plans to manufacture bar fridges and the following information is applicable: Estimated sales for the year 5 000 units at R3 400 each Estimated costs...

Why is it sometimes difficult to get needed information from patients? What approaches should be used to gain that information?

On October 27, 2011, a freak snowstorm destroyed the work-in-process of the company, who promptly filed a claim with their insurance company for the lost work-in-process inventory, and raw materials...

If an entity financial records do not contain sufficient evidentiary matter the auditor must: ( a ) issue a qualified opinion. ( b ) decline the audit. ( c ) perform the audit and obtain the evidence...

Determine the major differences between U.S. GAAP and IFRS disclosure reporting requirements related to each separately reportable operating segment. Next, give your opinion as to whether either U.S....