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Marginal Costing

Costing

In this example, I couldn't understand the last point (which has been marked) sir. Can you explain how the sales below 30,000 units will yield higher profits in option (i) and sales above 30,000 units will yield higher profits in option (ii) by looking the graph sir?

Viveka R

Viveka R

CA Inter

★ 890

19-Jul-20 07:14

397

Answers (2)

You can see that at 30,000 units both lines intersect. i.e. profits are equal. After that point the line which is above will give higher profit.

CA Suraj Lakhotia

CA Suraj Lakhotia

Admin

20-Jul-20 12:55

CA Suraj Lakhotia Admin

You can see that at 30,000 units both lines intersect. i.e. profits are equal. After that point the line which is above will give higher profit.

Ok sir. Thank you!

Thread Starter

Viveka R

Viveka R

CA Inter

★ 890

20-Jul-20 13:03

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