1) With the following information, calculate: (10marks)
a) Contribution
b) PV Ratio
c) BE Ratio (in no. of units and value)
d) MOS at actual sales of Rs. 9,00,000/-
- Numberof watches to be sold to get a profit of 18,000/-
Amt. in Rs.
Sale Price | Per unit | 10,000 |
Raw Material | Per unit | 5,000 |
Power | Per unit | 500 |
Factory Wages (variable) | Per unit | 1,000 |
Rent | Per month | 80,000 |
Salaries | Per Month | 1,00,000 |
Telecom and Printing | Per month | 45,000 |
Travel | Per Month | 25,000 |
- Pritam owns a glass factory and is in the business of making cups and glasses. He gets an orderto supply 20,000 nos. of a specific type of The variable cost to make the glass totals to about Rs. 45 per glass and the total fixed cost is Rs. 3,00,000.
How should Pritam price his glasses under:
- CostPlus Pricing to earn a profit of 10%
- VariableCost Plus contribution to earn a contribution margin of 20%.
Compare the results and discuss under what situation each type will be beneficial. Which of the two methods will Pritam choose if he has surplus capacity to manufacture the glasses without incurring any additional fixed cost. (10 marks)
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- Divya went to Dhanalaxmi Bank to get a loan for her Business Needs. As the Loan approving officer of the Bank, which ratios shall you look at to establish that it is safeto give Divya a loan, considering her capacity to repay the loan back along with the interest? Explain any two ratios along with their formula.
(5 Marks)
- Withthe following information, prepare the Budgeted Profit for the year for Company PQR Ltd. (5 marks)
UoM | P | Q | R | S | |
No. of Units | Nos. in
‘000s |
20 | 30 | 40 | 100 |
Sales Price | Rs./Unit | 100 | 50 | 25 | 45 |
Variable Costs | Rs./Unit | 40 | 20 | 5 | 25 |
Fixed Costs | Rs. | 200,000 |
In addition to the above, each unit has semi-variable expenses of power, which are Rs. 150,000 for all products put together and @ Rs. 10 per unit of production beyond it.
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