Determine the fixed component is the semi varible cost of m/s model ho...
Fixed and Semi-Variable Costs in M/S Model House LTD
Fixed costs are those that do not vary with changes in production levels, while semi-variable costs are those that have both a fixed and variable component. In the case of M/S Model House LTD, the fixed component and semi-variable cost can be determined as follows:
Fixed Cost
- The fixed cost of M/S Model House LTD is not provided in the given information.
- However, it can be assumed that fixed costs include expenses that do not change with changes in production levels, such as rent, salaries, insurance, and depreciation.
- Fixed costs are important to determine because they have a direct impact on the breakeven point of the company.
Semi-Variable Cost
- The given information states that the semi-variable cost of producing 5000 units is RS 24000, while producing an additional 1000 units incurs semi-variable expenses of RS 1800.
- This means that the semi-variable cost has a fixed component of RS 24000 and a variable component of RS 1800 for every additional 1000 units produced.
- The variable component of semi-variable costs includes expenses that increase with production levels, such as labor, materials, and utilities.
- Semi-variable costs are important to determine because they affect the overall cost structure of the company and can impact pricing decisions.
In conclusion, the fixed component and semi-variable cost of M/S Model House LTD can be determined by analyzing the information provided. Fixed costs are those that do not change with production levels, while semi-variable costs have both a fixed and variable component. Understanding these cost components is important for making informed business decisions and setting pricing strategies.
Determine the fixed component is the semi varible cost of m/s model ho...
The profit and loss statement of richa,ltd.disclosed a net profit of rs.66500 for the gear