Assumptions

Capacity being expanded it is assumed that increase should be for product C

Product losing out but fixed cost remains same
Considered having one BEP for all products, than individually for each
Product mix is constant

EXHIBIT 3 Product Class Cost Analysis Normal Year

Sales at full capacity (units)

Actual sales volume (units)
Unit sales price
Total sales revenue
Variable cost per unit
Total variable cost
Fixed costs
Profit
Ratios
Variable cost to sales
Unit contribution to sales
Utilization of capacity

Aggregate
2000000
1500000
7.20
10800000
4.50
6750000
2970000
1080000

600000
10.00
6000000
7.50
4500000
960000
540000

400000
9.00
3600000
3.75
1500000
1560000
540000

500000
2.40
1200000
1.50
750000
450000
nil

0.625
0.375
75%

0.75
0.25
30%

0.42
0.58
20%

0.625
0.375
25%

1500000

1.6
54000
1500000
937500

3.9

0.9

After rework
Sales at full capacity (units)
Actual sales volume (units)
Unit sales price
Total sales revenue
Variable cost per unit
Total variable cost
Fixed costs
Profit
Ratios
Variable cost to sales
Unit contribution to sales
Utilization of capacity
Contribution margin

Aggregate
2000000
1750000
6.95
12160000
5925000
1080000
0.625
0.375
75%

400000
10.00
4000000
7.50
3000000
960000
540000

400000
9.00
3600000
3.75
1500000
1560000
540000

950000
4.80
4560000
1.50
1425000

0.75
0.25
30%
2.50

0.42
0.58
20%
5.25

0.625
0.375
25%
3.30