Answer Posted / swathi
depreciation is a decreasing value.it is deducting in
annually.due to the scrap we are deducting the depreciation
value.when we know the actual value of the asset we should
deduct the depreciation according to the asset life
time. depreciation=asset value-scrap value
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You are required to show the effect of each of the following changes on profit and Break-Even-Volume from the information given below: Sales 50,000 units Rs. 5.00 per unit Variable cost Rs. 3.00 per unit Fixed cost Rs. 70,000 Changes: (i) Price changes by 20%. (ii) Volume decreases to 40,000 units. (iii) Variable cost increases to Rs 3.50 per unit. (iv) Fixed cost decreases by 10%.
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