Input Assumptions Standard Standard Standard

Product : Energy drink Packed in good quality packed

containers
Targeted production and sales (No of containers) No of bottles 5000 10000 15000 Volume
Targeted selling price (Per container) Per bottle 50 50 50 Price
Ingrediants (cost of direct materials) Per container Per bottle 20 20 20
Machine & equipment for processing (Rented) per month Rentals Per month 10000 10000 10000
Labour force (Cost of making) per container Labour cost Per bottle 5 5 5
Pemises (hired on rent) - rental per month Rentals Per month 15000 15000 15000 Cost
Supervisor's salary to handle operations - per month salary Per month 30000 30000 30000
Marketing person salary - per month Per month 25000 25000 25000
Salary - incentive on sales - per container Sales incentive Per bottle 3 3 3

Cost Object Per bottle of energy drink

Cost Analysis
Resources Cost driver Volumes Unit Cost Per driver Unit cost Cost
Direct Materials No of bottles produced(=G5) 5000 Cost per bottle(=G7) 20 100000 200000 300000
Labour cost per bottle 5
Direct Labour No of bottles produced (=G5) 5000 (=G9) 25000 50000 75000
Machine and equipment rental No of months(=1) 1 10000(=G8) 10000 10000 10000 10000
Rent for premises No of months(=1) 1 15000(=G10) 15000 15000 15000 15000
Salary - Fixed No of months(=1) 1 30000(=G11) 30000 30000 30000 30000
Salary - Fixed No of months(=1) 1 25000(=G12) 25000 25000 25000 25000
Salary - incentive No of bottles sold(=G5) 5000 3(=G13) 3 15000 30000 45000
Total Cost 220000 360000 500000 Cost
Cost Per Unit 44 36 33.333333
Selling price per unit 50 50 50 Price

Classification of variable and fixed cost

Variable cost
Direct Materials 100000 200000 300000
Direct Labour 25000 50000 75000
Salary - Incentive on sales 15000 30000 45000
Total Variable cost 140000 280000 420000 Variable costs are those that change with the change in cost drivers
Variable cost / unit 28 28 28 Variable costs per unit does not change with the change in cost drivers
Fixed Cost
Machine and equipment rental 10000 10000 10000
Rent for premises 15000 15000 15000
Salary -supervisor 30000 30000 30000
Salary - Marketing 25000 25000 25000
Total Fixed cost 80000 80000 80000 Fixed costs are those that do not change witht he change in cost drivers
Total Fixed Cost per unit 16 8 5.3333333 Fixed cost per unit changes with changes in the cost drivers

sales 250000 500000 750000

variable cost 140000 280000 420000
variable cost is same whether you take overall or per unit. contributioon 110000 220000 330000
fixed cost per unit comes down with increase in sales per unit varaible cost 22 variable cost % on sales 56 56 56
fixed cost 80000 80000 80000
fixed cost % on sales 32 16 10.666667
net profit 30000 140000 250000
net profit % on sales 12 28 33.333333

BEP 3636.364 3636.3636 3636.3636

sales 181818.2 181818.18 181818.18
variable cost 101818.2 101818.18 101818.18
contribution 80000 80000 80000
fixed cost 80000 80000 80000
net profit 0 0 0
Assumptions

Product Energy drink (packaged in containers)

Targeted Monthly production and sales
Targeted selling price
Cost object Per bottle of entergy drink
Resources required Cost
Ingrediants Cost of Direct Material for making the prod
Machine & equipment for processing (RenteCost of Monthly lease rental
Labour force Cost of Labour
Pemises (hired on rent) Cost of Monthly rentals
Area occupied
Supervisor to handle operations Salary - Monthly fixed
Resource - time spent on operations
Marketing person Salary -fixed
Resource - time spent on sales
Salary - incentive on sales Salary - incentive on sales

Cost Workings
Direct Materials
Direct Labour
Machine and equipment rental
Rent for premises
Salary - Fixed Supervisor
Salary - Fixed Marketing
Salary - incentive based on sales
Total Cost
Cost Per Unit
Sales value
Net margin
Selling price per unit

Classification of direct and direct cost

Direct materials
Direct Labour
Total Direct Labour cost
Direct cost per unit
Indirect Cost
Machine and equipment rental
Rent
Salary -Fixed Supervisor
Salary - Fixed Marketing
Salary - Incentive on sales Marketing
Total Indirect Cost
Total Indirect Cost per unit

Classification of variable and fixed cost

Sales Value
Variable cost
Direct Materials
Direct Labour
Salary - Incentive on sales
Total Variable cost
Variable cost / unit
Contribution
Contribution per unit
Fixed Cost
Machine and equipment rental
Rent for premises
Salary -supervisor
Salary - Marketing
Total Fixed cost
Total Fixed Cost per unit
 Common
Unit resource Standard Premium

No of bottles
No of bottles 5000 1500
Per bottle 50 100

Per bottle 20 60
Per month 10000 15000
Per bottle 5 10
Per month 15000
Sq.feet 1000 1500
Per month 30000
40% 60%
Per month 25000
30% 70%
Per unit 3 5

Total
190000 100000 90000
40000 25000 15000
25000 10000 15000
15000 6000 9000
30000 12000 18000
25000 7500 17500
22500 15000 7500
347500 175500 172000
35.1 114.6667
400000 250000 150000
52500 74500 -22000
50 100

100000 90000
25000 15000
125000 105000
25 70
Direct cost are those that can be directly traced to a cost object
10000 15000
6000 9000 Indirect cost are those that may not be easily traced to a cost object
12000 18000
7500 17500
15000 7500
 50500 67000
10.1 44.66667

400000 250000 150000

190000 100000 90000

40000 25000 15000
22500 15000 7500
252500 140000 112500
28 75
147500 110000 37500
22 25

25000 10000 15000

15000 6000 9000
30000 12000 18000
25000 7500 17500
95000 35500 59500
7.1 39.66667
raced to a cost object

sily traced to a cost object

 INPUT INFORMATION
Q1. variable cost % of revenue 80%
fixed cost ( in million $) 20
No. of patients 70000

break even point ( in million $) [ fixed cost/ contribution] 100

Q2. INPUT INFORMATION

variable cost % of revenue 50%
fixed cost ( in million $) 40
No. of patients 40000

break even point ( in million $) [ fixed cost/ contribution] 80

INPUT INFORMATION
Q3. Total fixed cost 313500
variable cost per unit 99
selling price per unit 154
targeted net profit 59400

number of units for sale 6780

desired sales 1044120

Q4. INPUT INFORMATION

contribution margin 0.3
targeted net income 76800
targeted sales volume 480000

formula required sales value = fixed cost + net income/ cont. margin
fixed cost 67200

Q5. INPUT INFORMATION

sales price per unit 100
fixed cost 75000
break even sales 250000

No. of units sold 2500

break even sales 250000
fixed cost 75000
variable cost 175000
variable cost per unit 70

Q6. INPUT INFORMATION

Sales 14268
 Cost of goods sold 10617
Gross margin 3651
Other operating expenses 4417
Loss from operations -766
Fixed costs (COGS) 2400
Fixed costs ( operating expenses) 3000

variable cost (cogs) 8217

variable cost (operating expenses) 1417

a. Contribution 4634
Contribution margin 32.48

Gross margin percentage 25.59

b.

c. Sales 15694.8
Variable cost cogs 9038.7
Variable cost operating expenses 1558.7
Contribution 5097.4
Fixed costs 5400
Net income -302.600000000001

d. We are assuming that we have capacity to expand and have resources to increase.

Q7. oct
No. of times cleaning 35
Area 4000
total area cleaned 140000
Cost of cleaning 18000
cleaning supplies cost 8400
supplies cost 0.06
total cost 26400

total area sq. feet outside cleaning charge

oct 140000 0.17
nov 180000 0.17
dec 200000 0.17
Q8. Sales ₹ 10,000,000.00
COGS ₹ 6,500,000.00
Gross profit ₹ 3,500,000.00
Selling and admnt. ₹ 2,800,000.00
Operating income ₹ 700,000.00
fixed manufacturing cost ₹ 2,900,000.00
fixed selling and admnt. ₹ 2,000,000.00
sales commission ₹ 300,000.00

Variable cost ₹ 4,400,000.00

Number of key chains ₹ 150,000.00

Selling price ₹ 660,000.00
Selling price per unit 4.4

Q9. Selling price per unit 12.5

Variable cost per unit:
direct materials 5
direct labor 3
manufacturing overhead 1
selling and admnt. 0.25
Fixed costs:
admin and other overheads 80000
Selling and admnt. 35000

a. Income statement
Number of units 100000
Sales 1250000
Variable costs 925000
Contribution 325000
Fixed costs 115000
Net income 210000

b. Contribution margin 26
Break even level sales ( fixed cost/ contribution margin) 4423.07692307692
Break even sales value 55288.4615384615

Margin of safety value 1194711.53846154

Margin of safety volume

c. additional units to sell 25000

Selling price per unit 10
 Income statement
Sales 1500000
Variable costs 1156250
Contribution 343750
Fixed costs 115000
Net income 228750

Q10. Average price of beer 5

Average cost of beer 3.5
Bartender salary per month 2000
Waiter salary per month 3000
Rent and other fixed expenses 1000
Average sales per day 100
Number of days 360
Total cost 1260

a. Income statement
sales 180000
variable cost 126000
contribution 54000
fixed cost 72000
net income -18000

b. profit 7000
desired sales 52666.6666666667
desired per day sales 146.296296296296

c. sales increase by 5 time 900000

desired profit 8000
additional investment 1342000

Q11. Net revenue 800000

expenses 880000
net loss 80000

Additional advt. expenditure 200000

Break even revenue 1080000

targeted profit 40000

net sales 1120000
 total variable cost
9634
variable cost percentage of sales
67.52

10597.4 variable expenses

32.4782730586 contribution margin

relevant range

nov dec
45 50
4000 4000
180000 200000
18000.00 18000.00
10800.00 12000.00

28800.00 30000.00

Outsource cost Inhouse cost saving

23800 26400 2600
30600 28800.00 -1800.00
34000 30000.00 -4000.00
Sales 7,500,000
Variable cost 4,690,000 62.53% variable cost % of sales
Contribution 2,810,000
Fixed cost 1,400,000
EBIT 1,410,000
Interest 200,000
EBT 1,210,000
Taxation 605,000
Net profit after taxes 605,000

Equity Capital and liabilities

Equity capital ₹ 1,000,000.00
Reservs& Surplus ₹ 4,200,000.00
Lont term debt (10%) ₹ 2,000,000.00
Current liabilities ₹ 500,000.00
TOTAL ₹ 7,700,000.00
Assets
Fixed ₹ 6,000,000.00
Inventory ₹ 600,000.00
Receivables ₹ 700,000.00
Cash ₹ 400,000.00
Total ₹ 7,700,000.00

Contribution margin 266.90%

Break even sales ₹ 524,533.33 6.99%
Forecasted sales ₹ 8,000,000.00
Variable cost ₹ 5,002,666.67
contribution ₹ 2,997,333.33
Fixed cost ₹ 1,540,000.00
EBIT ₹ 1,457,333.33
Interest 200,000
EBT ₹ 1,257,333.33

Operating leverage budgeted year Operating leverage last year

contribution ₹ 2,997,333.33 2,810,000
EBIT ₹ 1,457,333.33 1,410,000
Operating leverage 2.06 1.99

Financial leverage budgeted year Financial leverage last year

EBIT ₹ 1,457,333.33 1,410,000
EBT ₹ 1,257,333.33 1,210,000
Financial leverage 1.16 1.17

Combined leverage budgeted year Combined leverage last year

Contribution ₹ 2,997,333.33 2,810,000
EBT ₹ 1,257,333.33 1,210,000
Combined leverage 2.38 2.32
variable cost % of sales
INPUT INFORMATION Cost per annum
Monthly rent 75000
Equipment cost 1500000 150000
Interior work 500000 50000
Useful life 10 equipment cost
Selling price per plate 400 interior work
Variable cost per plate 240 rent
Fixed cost per plate 40 salaries
Salaries 440000 other expenses
Other expenses per month 300000 total fixed cost
No of days in year 360 total fixed plate cost
fixed cost per annum 11280000 total fixed cost per annum

Budgeted income statement

No. of plates 200 250 300
Sales ₹ 28,800,000.00 ₹ 36,000,000.00 ₹ 43,200,000.00
Variable cost ₹ 17,280,000.00 ₹ 21,600,000.00 ₹ 25,920,000.00
Contribution ₹ 11,520,000.00 ₹ 14,400,000.00 ₹ 17,280,000.00
Fixed cost ₹ 12,860,000.00 ₹ 13,580,000.00 ₹ 14,300,000.00
Net income -₹ 1,340,000.00 ₹ 820,000.00 ₹ 2,980,000.00

fixed cost per day ₹ 35,722.22

break even sales 223.26
 200 250 300
150000
50000
900000
5280000
3600000
9980000 9980000 9980000
2880000 3600000 4320000
12860000 13580000 14300000