C.A. S.P.

DESAI MARKETING AND FINANCE

Q.1. Boots Trading Co. maintains three salesmen X,Y, and Z in Territory 1. The following information is obtained for the month of March,19X9: Rs. Salary of salesmen 2,500 Commission 400 Travelling Expenses 600 Postage & stationery 200 Telephone & telegraphs 300 Territory 1 expenses 2000 Net sales 20,000 Cost of sales 60% of sales From the following information prepare a sales performance Statement:Salesman Sales Salary Commission Travelling Postage Expense & Stationery Rs. Rs. Rs. Rs. Rs. X 8,000 1,150 200. 400 100 Y 7,000 700 100 150 50 Z 5,000 650 100 50 50 Total 20,000 2,500 400 600 200 Telephone & Telegraph Rs. 150 50 100 300

Q.2. A factory produces two products, A and B the cost of production and gross profit in respect of each for August 19x9 are given below : A 400 Per unit Rs. 100 200 100 400 800 200 1,000 B 100 Per unit Rs. 350 100 50 200 700 300 1,000

Units produced Direct material cost Direct wages Variable overhead Fixed overhead Cost of production Gross profit Sales price

Comment on the profitability of the products and state which product will give more profit during heavy demand.

C.A. S.P. DESAI MARKETING AND FINANCE Q.3. AB Co., Ltd. manufactures two products A and B and sells them through two divisions- North and South. For the purpose of submission of sales budget to the budget committee the following information has been made available:Budgeted sales for the current year were : Product North South A 4,000 at Rs. 9 6,000 at Rs.9 B 3,000 at Rs. 21 5,000 at Rs.21 Actual sales for the current year were : Product A B North 5,000 at Rs. 9 2,000 at Rs. 21 South 7,000 at Rs. 9 4,000 at Rs. 21

Adequate market studies reveal that product A is popular but under priced It is observed that if the price of A is increased by Re.1 it will still find a ready market On the other hand , B is over priced to customers and the market could absorb more if sales price of B be reduced by Re.1 The management has agreed to give effect to the above price changes. From the information based on these price changes and reports from salesmen, the following estimates have been prepared by divisional managers :Percentage increase in sales over current budget is :Product A B North +10% +20% South +5% +10%

With the help of an intensive advertisement campaign the following additional sales over the estimated sales of divisional managers are possible :Additional sales above the estimated sales of divisional managers: Product A B North Units 600 400 South Units 700 500

You are required to prepare a budget for sales incorporating the above estimates and also show the budgeted and actual sales of current year.

C.A. S.P. DESAI MARKETING AND FINANCE