Accounting 9706 · AS & A Level · Costs and cost behaviour

Costs and cost behaviour — practice question

V Limited is a manufacturing business that applies marginal costing.
(a)[3]

Define the following: marginal cost contribution break-even point.

(b(i))[2]

Calculate the break-even output in units.

(b(ii))[1]

Calculate the break-even point expressed as sales value.

(c)[7]

Calculate the rise in the monthly margin of safety in units, assuming every unit produced is sold.

Worked solution & mark scheme

This 13-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Marginal cost: the cost added by making one further unit” …

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