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Margin of safety
Measures the sensitivity of budgeted sales volume compared with break-even sales volume. The difference between level of sales activity achieved and level of sales activity required to break-even in absolute or percentage terms.
Margin of safety (units)= Budgeted sales volume less Break-even sales volume
Margin of safety (%)= (Budgeted sales less Break-even sales volume/ Budgeted sales volume) x 100 Number of units sold to achieve a target profit= (Fixed cost + Target profit)/Contribution per unit
Contract Costing It is a form of exact order costing, which is applied to relatively large cost units that normally get a considerable length of time to complete as an example
Advantages of Standard Costing 1. Management via Exception: the standard costing is an example for management via exception. By studying the variances, management's attentio
standard hours = 5000 standard wages = Rs.3/hr actual hours worked = 5600 hrs actual wages paid = 17920
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