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    Sandeep Rawat
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    Hardhat case_Rajesh Kumar Nayak

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    9 views12 pages

    Hardhat Case - Rajesh Kumar Nayak

    Uploaded by

    Sandeep Rawat

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 12

    Hardhat Ltd Projected Income Statement 2000/2001

    Sales £ 10,000,000.00
    Material Cost £ 3,000,000.00
    Direct Labour Cost £ 2,000,000.00
    Production Over Head £ 1,000,000.00
    Indirect fixed cost £ 40,000.00
    Indirect Variable Cost £ 960,000.00
    COGS £ 6,000,000.00
    Gross Profit £ 4,000,000.00
    Selling Expenses £ 1,500,000.00
    Administrative Expenses £ 1,000,000.00
    Total Periodic Expenses £ 2,500,000.00
    Net Profit before Tax £ 1,500,000.00

    No of Units Sold 100,000

    Hardhat Ltd Projected Income Statement 2001/2002


    Sales £ 13,504,800.00
    Material Cost £ 4,680,000.00
    Direct Labour Cost £ 2,730,000.00
    Production Over Head £ 1,414,800.00
    Indirect fixed cost £ 42,000.00
    Indirect Variable Cost £ 1,372,800.00
    COGS £ 8,824,800.00
    Gross Profit £ 4,680,000.00
    Selling Expenses £ 1,620,000.00
    Administrative Expenses £ 1,060,000.00
    Total Periodic Expenses £ 2,680,000.00
    Net Profit before Tax (Target) £ 2,000,000.00

    No of Units Sold 130,000


    01
    Price/Unit
    £ 100.00
    £ 30.00
    £ 20.00
    £ 10.00
    £ 0.40
    £ 9.60
    £ 60.00
    £ 40.00
    £ 15.00
    £ 10.00
    £ 25.00
    £ 15.00

    Ans:
    02 Target Sales Volume is: 30% increase = 1.3*100,000 = 130,000 nos
    Price/Unit 20% increase in unit cost of material, so new unit cost of material is: 30*1.2= £ 36
    Total Material Cost= 130,000* £ 36 = £ 4,680,000
    £ 103.88 5% increase in direct labour cost per unit, no new labour cost per unit is: £ 20*1.05= £ 21.00
    £ 36.00 Total Direct Labour Cost= 130,000* £ 21 = £ 2,730,000
    £ 21.00 10% increase in variable indirect cost per unit, i.e. £ 9.60*1.1 = £ 10.56
    Total Indirect Varibale Cost= 130,000* £ 10.56= £ 1,372,800
    5% increase in indirect fixed cost, so new fixed cost is: £ 40,000*1.05= £ 42,000.
    Total Production Over Head= £ 1,372,800+ £ 42,000= £ 1,414,800
    Total COGS= £ 4,680,000+ £ 2,730,000+ £ 1,414,800 = £ 8,824,800
    £ 10.56
    8% increase in selling expenses, new selling expenses= £ 1,500,000*1.08 = £ 1,620,000
    6% increase in admin expenses, new admin expenses= £ 1,000,000*1.06= £ 1,060,000
    Total Periodic expenses= £ 1,620,000+ £ 1,060,000= £ 2,680,000
    As the target net profit before tax is £ 2,000,000
    Gross Profit should be: £ 2,000,000+ £ 2,680,000= £ 4,680,000
    So the sales revenue shuold be= £ 4,680,000 + £ 8,824,800= £ 13,504,800
    The unit sales prices needed =£ 13,504,800/ 130,000 = £ 103.88
    2= £ 36

    20*1.05= £ 21.00

    ,000.

    £ 1,620,000
    £ 1,060,000
    Hardhat Ltd Projected Income Statement 2000/2001

    Sales £ 10,000,000.00
    Material Cost £ 3,000,000.00
    Direct Labour Cost £ 2,000,000.00
    Production Over Head £ 1,000,000.00
    Indirect fixed cost £ 40,000.00
    Indirect Variable Cost £ 960,000.00
    COGS £ 6,000,000.00
    Gross Profit £ 4,000,000.00
    Selling Expenses £ 1,500,000.00
    Administrative Expenses £ 1,000,000.00
    Total Periodic Expenses £ 2,500,000.00
    Net Profit before Tax £ 1,500,000.00

    No of Units Sold 100000

    Hardhat Ltd Projected Income Statement 2001/2002

    Sales £ 14,556,103.58
    Material Cost £ 5,240,197.29
    Direct Labour Cost £ 3,056,781.75
    Production Over Head £ 1,579,124.54
    Indirect fixed cost £ 42,000.00
    Indirect Variable Cost £ 1,537,124.54
    COGS £ 9,876,103.58
    Gross Profit £ 4,680,000.00
    Selling Expenses £ 1,620,000.00
    Administrative Expenses £ 1,060,000.00
    Total Periodic Expenses £ 2,680,000.00
    Net Profit before Tax (Target) £ 2,000,000.00

    No of Units Sold 145,561


    Price/Unit
    £ 100.00
    £ 30.00
    £ 20.00
    £ 10.00
    £ 0.40
    £ 9.60
    £ 60.00

    £ 15.00
    £ 10.00
    £ 25.00
    £ 15.00

    Price/Unit
    £ 100.00
    £ 36.00
    £ 21.00
    100*x-(36x+21x+10.56x+42000)=
    =>
    £ 10.56 100x-36x-21x-10.56x
    32.44x=
    x=
    £ 4,680,000.00
    £ 4,722,000.00
    £ 4,722,000.00 67.56
    145,561 32.44
    Hardhat Ltd Projected Income Statement 2000/2001

    Sales £ 10,000,000.00
    Material Cost £ 3,000,000.00
    Direct Labour Cost £ 2,000,000.00
    Production Over Head £ 1,000,000.00
    Indirect fixed cost £ 40,000.00
    Indirect Variable Cost £ 960,000.00
    COGS £ 6,000,000.00
    Gross Profit £ 4,000,000.00
    Selling Expenses £ 1,500,000.00
    Administrative Expenses £ 1,000,000.00
    Total Periodic Expenses £ 2,500,000.00
    Net Profit before Tax £ 1,500,000.00

    No of Units Sold 100000

    Hardhat Ltd Projected Income Statement 2001/2002

    Sales £ 11,427,138.46
    Material Cost £ 3,960,000.00
    Direct Labour Cost £ 2,310,000.00
    Production Over Head £ 1,203,600.00
    Indirect fixed cost £ 42,000.00
    Indirect Variable Cost £ 1,161,600.00
    COGS £ 7,473,600.00
    Gross Profit £ 3,953,538.46
    Selling Expenses £ 1,620,000.00
    Administrative Expenses £ 1,060,000.00
    Total Periodic Expenses £ 2,680,000.00
    Net Profit before Tax (Target) £ 1,273,538.46

    No of Units Sold 110,000


    Price/Unit
    £ 100.00
    £ 30.00
    £ 20.00
    £ 10.00
    £ 0.40
    £ 9.60
    £ 60.00
    £ 40.00
    £ 15.00
    £ 10.00
    £ 25.00
    £ 15.00

    Price/Unit
    £ 103.88
    £ 36.00
    £ 21.00

    £ 10.56
    Hardhat Ltd Projected Income Statement 2000/2001

    Sales £ 10,000,000.00
    Material Cost £ 3,000,000.00
    Direct Labour Cost £ 2,000,000.00
    Production Over Head £ 1,000,000.00
    Indirect fixed cost £ 40,000.00
    Indirect Variable Cost £ 960,000.00
    COGS £ 6,000,000.00
    Gross Profit £ 4,000,000.00
    Selling Expenses £ 1,500,000.00
    Administrative Expenses £ 1,000,000.00
    Total Periodic Expenses £ 2,500,000.00
    Net Profit before Tax £ 1,500,000.00

    No of Units Sold 100000

    Hardhat Ltd Projected Income Statement 2001/2002


    Total
    Sales £ 12,465,969.23
    Material Cost £ 4,320,000.00
    Direct Labour Cost £ 2,520,000.00
    Production Over Head £ 1,309,200.00
    Indirect fixed cost £ 42,000.00
    Indirect Variable Cost £ 1,267,200.00
    COGS £ 8,149,200.00
    Gross Profit £ 4,316,769.23
    Selling Expenses £ 1,620,000.00
    Administrative Expenses £ 1,060,000.00
    Total Periodic Expenses £ 2,680,000.00
    Net Profit before Tax (Target) £ 1,636,769.23

    No of Units Sold 120,000


    Price/Unit
    £ 100.00
    £ 30.00
    £ 20.00
    £ 10.00
    £ 0.40
    £ 9.60
    £ 60.00
    £ 40.00
    £ 15.00
    £ 10.00
    £ 25.00
    £ 15.00

    Price/Unit
    £ 103.88
    £ 36.00
    £ 21.00

    £ 10.56

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