You are on page 1of 2

# Calculations:

Product
Units
(Demand)
Selling
Price
Raw
Material Cost
Contribution
per unit
Units
Produced
Total
Contribution
A 40 180 65 115 40 4600
D 50 240 95 145 50 7250
F 40 180 65 115 40 4600

16450

Total Contribution

16450
Fixed Expense

11000
Profit

5450

Formulas used:
Contribution per unit = Selling price Raw Material Cost

Contribution from Product = Units Produced * Contribution per unit

Total Contribution = Contribution from product A + Contribution from product B
+ Contribution from product C + Contribution from product D

Profits = Total Contribution Fixed Expense

Calculations to plan production levels
Raw material requirement

Material Product A

Product D

Total Raw Material
Required
A Demand of A - WIP at A5 + Demand D - WIP at C5

40 - 10 = 30 + 50-15 = 35 = 65

Material Product A

Product D

Total Raw Material
Required
C Demand of A - WIP at A5 + Demand D - WIP at D5

40 - 10 = 30 + 50-15 = 35 = 65

Material Product D

Total Raw Material
Required
E Demand D - WIP at E2

50-15 = 35 = 35

Material Product F

Total Raw Material
Required
F Demand F - WIP at F5

40-10 = 30 = 30

Cash available 10000
Expenditure on 7225
Cash Left 2775

Increased demand for product D 10
Per unit cost of raw material for D 65
Total cost for product D 10 units 650

Cash remaining: 2775 - 650 = 2125

Per unit cost of raw material for Product A 65

No of A units that can be produced: 2125 / 65 = 32 units of A