J F M

Inter 206 181 223

Commercial 123 135 138
329 316 361
SP per hr Inter Co 400 400 400
SP per hr Commercial 800 800 800

Sales
Inter Company 82400 72400 89200
Commercial 98400 108000 110400

Expenses J F M Characteristics
Space rent 9240 9240 9240 F
Equipment costs 100400 100400 100400 F
Depreciation 26180 26180 26180 F
Power 1579 1517 1733 V
Power 54 75 70 F
Wages and Salaries - Other than
Operations 32200 32200 32200 F
Wages and Salaries - Operations 7896 7584 8664 V
Wages and Salaries - Operations 21600 21600 21600 F

Materials 9031 8731 10317 ignored Lack of information and do

Sales promotion 7909 7039 8083 Fixed Doesnot change with the n
Corporate Services 15424 15359 15236 ignored As the payment to the staff

Existing J F M
Intercompany Hrs. 206 181 223
Commercial Hrs. 123 135 138
Total Hrs. 329 316 361
SP per hr Inter Co 400 400 400
SP per hr Commercial 800 800 800

Sales
Inter Company 82400 72400 89200
Commercial 98400 108000 110400
Total Sales 180800 180400 199600
Less: Variable Costs 9475 9101 10397
Contribution 171325 171299 189203 Positive and should continue with increasin
Less: Fixed Costs 197583 196734 197773
Profit -26258 -25435 -8570

Q. 2 Company demand of 205 Hrs. IC C Total Q.3 a

Intercompany Hrs. 205
Commercial Hrs. ?

SP per hr Inter Co 400

SP per hr Commercial 800
Variable cost per hr. 28.8 28.8
Contribution per hr 371.2 771.2
Total contribution for BEP 197773

Less: Fixed Costs 197773

Profit @ BEP 0
Contribution by Inter Co as demand
is 205 hrs 76096
Balance contribution from
commercial 121677
No. of Hrs. for commercial for BEP 158
 Bifurcation of Semi variable expenses done with Regression Analysis
Hrs Expenses Variable Fixed Variable cost per unit
Power 329 1633 1579 54 4.8
316 1592 1517 75 4.8
361 1803 1733 70 4.8

Hrs Expenses Variable Fixed Variable cost per unit

Operations Wages 329 29496 7896 21600 24
316 29184 7584 21600 24
361 30264 8664 21600 24

Lack of information and doesnot follow the bifurcation as per regression

Doesnot change with the number of hours served
As the payment to the staff of PTC is irrespective of this billing and therefore irrelevant
ould continue with increasing commercial hours

Increase in rate decrease in Decrease in rate

hrs IC C Total Q.3b increase in hrs
Hours 205 97 302 Hours
SP per hr 400 1000 SP per hr

Sales 82000 96600 178600 Sales

Inter Company Less: Variable Costs
Less: Variable Costs 5904 2782.08 8686 Contribution
Contribution 169914 Less: Fixed Costs

Less: Fixed Costs 197773 Profit

Profit -27859
IC C Total Q. 3 c Amount of Promotion IC C Total
205 180 385 Hours 205 180 385
400 600 SP per hr 400 800

82000 108000 190000 Sales 82000 144000 226000

11088 Less: Variable Costs 11088
178912 Contribution 214912
197773 Less: Fixed Costs 197773
Profit which can be
used up for
-18861 promotion 17139
Q. 3 d Amount of Promotion IC C Total
Hours 205 110 315
SP per hr 400 800

Sales 82000 88320 170320

Less: Variable Costs 9084
Contribution 161236
Less: Fixed Costs 197773
Profit -36537