Name: Alok Goel

Roll No. WMP 11003

Case Study Bill French

Case-I
Assumptions
1. Sales Volume of A reduced by 1/3 and C to be increased by ~ 450,000 Units in NY.
2. Sales price of Product C to be increased by 100 in NY%
3. Fixed cost of C to be increased by ~720,000/Ann by NY.
4. Variable cost in NY to be increased by 10% vs CY.
5. Divedent in NY to be increase by 50% as compared to CY.

Product Mix Product A Product B Product C

CY NY CY NY CY NY CY NY
Unit Capacity 2000000.00 2000000.00
Actual Sale 1500000.00 1750000.00 600000.00 400000.00 400000.00 400000.00 500000.00 950000.00
Unit Sale Price 7.20 6.95 10.00 10.00 9.00 9.00 2.40 4.80
Total; Sales Revenue 10800000.00 12160000.00 6000000.00 4000000.00 3600000.00 3600000.00 1200000.00 4560000.00
Variable cost/Unit 4.50 3.72 7.50 8.25 3.75 4.13 1.50 1.65
Total Variable cost 6750000.00 6517500.00 4500000.00 3300000.00 1500000.00 1650000.00 750000.00 1567500.00
Fixed cost 2970000.00 3690000.00 960000.00 960000.00 1560000.00 1560000.00 450000.00 1170000.00
Income 1080000.00 1952500.00 540000.00 -260000.00 540000.00 390000.00 0.00 1822500.00
Income Tax @ 50% 540000.00 976250.00 270000.00 -130000.00 270000.00 195000.00 0.00 911250.00
Divident 300000.00 450000.00
Retained earnings 240000.00 526250.00
Contribution margin 2.70 3.22 2.50 1.75 5.25 4.88 0.90 3.15
Break Even Point (Units) 1100000.00 1144439.52 384000.00 548571.43 297142.86 320000.00 500000.00 371428.57
Break Even Point ($) 7920000.00 7952219.76 3840000.00 5485714.29 2674285.71 2880000.00 1200000.00 1782857.14

Case-II
Assumptions
1. Sales Volume of A reduced by 1/3 and C to be increased by ~ 450,000 Units in NY.
2. Sales price of Product C to be increased by 100 in NY%

Product Mix Product A Product B Product C

CY NY CY NY CY NY CY NY
Unit Capacity 2000000.00 2000000.00
Actual Sale 1500000.00 1750000.00 600000.00 400000.00 400000.00 400000.00 500000.00 950000.00
Unit Sale Price 7.20 6.95 10.00 10.00 9.00 9.00 2.40 4.80
Total; Sales Revenue 10800000.00 12160000.00 6000000.00 4000000.00 3600000.00 3600000.00 1200000.00 4560000.00
Variable costUnit 4.50 4.50 7.50 7.50 3.75 3.75 1.50 1.50
Total Variable cost 6750000.00 5925000.00 4500000.00 3000000.00 1500000.00 1500000.00 750000.00 1425000.00
Fixed cost 2970000.00 2970000.00 960000.00 960000.00 1560000.00 1560000.00 450000.00 450000.00
Income 1080000.00 3265000.00 540000.00 40000.00 540000.00 540000.00 0.00 2685000.00
Income Tax @ 50% 540000.00 1632500.00 270000.00 20000.00 270000.00 270000.00 0.00 1342500.00
Divident 300000.00 300000.00
Retained earnings 240000.00 1332500.00
Contribution margin 2.70 2.45 2.50 2.50 5.25 5.25 0.90 3.30
Break Even Point (Units) 1100000.00 1212952.16 384000.00 384000.00 297142.86 297142.86 500000.00 136363.64
Break Even Point ($) 7920000.00 8428284.71 3840000.00 3840000.00 2674285.71 2674285.71 1200000.00 654545.45

CASE-III
Assumptions
1. Sales Volume of A reduced by 1/3 and C to be increased by ~ 450,000 Units in NY.
2. Sales price of Product C to be increased by 100 in NY%
3. Fixed cost of C to be increased by ~720,000/Ann by NY.

Product Mix Product A Product B Product C

CY NY CY NY CY NY CY NY
Unit Capacity 2000000.00 2000000.00
Actual Sale 1500000.00 1750000.00 600000.00 400000.00 400000.00 400000.00 500000.00 950000.00
Unit Sale Price 7.20 6.95 10.00 10.00 9.00 9.00 2.40 4.80
Total; Sales Revenue 10800000.00 12160000.00 6000000.00 4000000.00 3600000.00 3600000.00 1200000.00 4560000.00
Variable costUnit 4.50 3.39 7.50 7.50 3.75 3.75 1.50 1.50
Total Variable cost 6750000.00 5925000.00 4500000.00 3000000.00 1500000.00 1500000.00 750000.00 1425000.00
Fixed cost 2970000.00 3690000.00 960000.00 960000.00 1560000.00 1560000.00 450000.00 1170000.00
Income 1080000.00 2545000.00 540000.00 40000.00 540000.00 540000.00 0.00 1965000.00
Income Tax @ 50% 540000.00 1272500.00 270000.00 20000.00 270000.00 270000.00 0.00 982500.00
Divident 300000.00 300000.00
Retained earnings 240000.00 972500.00
Contribution margin 2.70 3.56 2.50 2.50 5.25 5.25 0.90 3.30
Break Even Point (Units) 1100000.00 1035685.65 384000.00 384000.00 297142.86 297142.86 500000.00 354545.45
Break Even Point ($) 7920000.00 7196535.69 3840000.00 3840000.00 2674285.71 2674285.71 1200000.00 1701818.18

Case-IV
Assumptions
1. Sales Volume of A reduced by 1/3 and C to be increased by ~ 450,000 Units in NY.
2. Sales price of Product C to be increased by 100 in NY%
3. Fixed cost of C to be increased by ~720,000/Ann by NY.
4. Variable cost in NY to be increased by 10% vs CY.

Product Mix Product A Product B Product C

CY NY CY NY CY NY CY NY
Unit Capacity 2000000.00 2000000.00
Actual Sale 1500000.00 1750000.00 600000.00 400000.00 400000.00 400000.00 500000.00 950000.00
Unit Sale Price 7.20 6.95 10.00 10.00 9.00 9.00 2.40 4.80
Total; Sales Revenue 10800000.00 12160000.00 6000000.00 4000000.00 3600000.00 3600000.00 1200000.00 4560000.00
Variable costUnit 4.50 3.72 7.50 8.25 3.75 4.13 1.50 1.65
Total Variable cost 6750000.00 6517500.00 4500000.00 3300000.00 1500000.00 1650000.00 750000.00 1567500.00
Fixed cost 2970000.00 3690000.00 960000.00 960000.00 1560000.00 1560000.00 450000.00 1170000.00
Income 1080000.00 1952500.00 540000.00 -260000.00 540000.00 390000.00 0.00 1822500.00
Income Tax @ 50% 540000.00 976250.00 270000.00 -130000.00 270000.00 195000.00 0.00 911250.00
Divident 300000.00 300000.00
Retained earnings 240000.00 676250.00
Contribution margin 2.70 3.22 2.50 1.75 5.25 4.88 0.90 3.15
Break Even Point (Units) 1100000.00 1144439.52 384000.00 548571.43 297142.86 320000.00 500000.00 371428.57
Break Even Point ($) 7920000.00 7952219.76 3840000.00 5485714.29 2674285.71 2880000.00 1200000.00 1782857.14

Case-V
Assumptions
1. Product Wise segregation
2. If volume of Product A is not reduced by 1/3 while volume of C increase to 950,000.
3. Sales price of Product C to be increased by 100 in NY%
4. Variable Cost per unit increased by 10%
5. Fixed Cost increased by 60000 X 12 = 720,000 under product C
6. Income tax of 50% added to PBT
7. Dividend increased by 50% (additional) as anniversary special dividend

Product Mix Product A Product B Product C

CY NY CY NY CY NY CY NY
Unit capacity 2000000.00 2000000.00
Acual Sales Volume 1500000.00 1950000.00 600000.00 600000.00 400000.00 400000.00 500000.00 950000.00
Unit Sales price 7.20 7.26 10.00 10.00 9.00 9.00 2.40 4.80
Total Sales Revenue 10800000.00 14160000.00 6000000.00 6000000.00 3600000.00 3600000.00 1200000.00 4560000.00
Variable Cost per unit 4.50 4.19 7.50 8.25 3.75 4.13 1.50 1.65
Total Variable Cost 6750000.00 8167500.00 4500000.00 4950000.00 1500000.00 1650000.00 750000.00 1567500.00
Fixed Cost 2970000.00 3690000.00 960000.00 960000.00 1560000.00 1560000.00 450000.00 1170000.00
Income 1080000.00 2302500.00 540000.00 90000.00 540000.00 390000.00 0.00 1822500.00
Income Tax (50% of income) 540000.00 1151250.00 270000.00 45000.00 270000.00 195000.00 0.00 911250.00
Dividend (50% extra in new ) 300000.00 450000.00
Contribution margin 2.70 3.07 2.50 1.75 5.25 4.88 0.90 3.15
Break-even volume 1100000.00 1200750.94 384000.00 548571.43 297142.86 320000.00 500000.00 371428.57
Break-even sales 7920000.00 8719299.12 3840000.00 5485714.29 2674285.71 2880000.00 1200000.00 1782857.14

Case-VI
Assumption
1. Volume of Product A reduced by 1/3rd and no change in Product C volume.
2. Sales price of Product C to be increased by 100 in NY%
3. Variable Cost per unit increased by 10%
4. Fixed Cost increased by 60000 X 12 = 720,000 under product C
5. Income tax of 50% added to PBT
6. Dividend increased to 50% extra to add anniversary special dividend

Product Mix Product A Product B Product C

CY NY CY NY CY NY CY NY
Unit capacity 2000000.00 2000000.00
Acual Sales Volume 1500000.00 1300000.00 600000.00 400000.00 400000.00 400000.00 500000.00 500000.00
Unit Sales price 7.20 7.69 10.00 10.00 9.00 9.00 2.40 4.80
Total Sales Revenue 10800000.00 10000000.00 6000000.00 4000000.00 3600000.00 3600000.00 1200000.00 2400000.00
Variable Cost per unit 4.50 4.44 7.50 8.25 3.75 4.13 1.50 1.65
Total Variable Cost 6750000.00 5775000.00 4500000.00 3300000.00 1500000.00 1650000.00 750000.00 825000.00
Fixed Cost 2970000.00 3690000.00 960000.00 960000.00 1560000.00 1560000.00 450000.00 1170000.00
Income 1080000.00 535000.00 540000.00 -260000.00 540000.00 390000.00 0.00 405000.00
Income Tax (50% of income) 540000.00 267500.00 270000.00 -130000.00 270000.00 195000.00 0.00 202500.00
Dividend (50% extra in new ) 300000.00 450000.00
Contribution margin 2.70 3.25 2.50 1.75 5.25 4.88 0.90 3.15
Break-even volume 1100000.00 1135384.62 384000.00 548571.43 297142.86 320000.00 500000.00 371428.57
Break-even sales 7920000.00 8733727.81 3840000.00 5485714.29 2674285.71 2880000.00 1200000.00 1782857.14

Case-VI
Assumption
1. Volume of Product A reduced by 1/3rd and no change in Product C volume.
2. Sales price of Product C to be increased by 100 in NY%
3. Variable Cost per unit increased by 10%
4. Fixed Cost increased by 60000 X 12 = 720,000 under product C
5. Income tax of 50% added to PBT
6. Dividend increased to 50% extra to add anniversary special dividend

Product Mix Product A Product B Product C

CY NY CY NY CY NY CY NY
Unit capacity 2000000.00 2000000.00
Acual Sales Volume 1500000.00 1750000.00 600000.00 400000.00 400000.00 400000.00 500000.00 950000.00
Unit Sales price 7.20 5.65 10.00 10.00 9.00 9.00 2.40 2.40
Total Sales Revenue 10800000.00 9880000.00 6000000.00 4000000.00 3600000.00 3600000.00 1200000.00 2280000.00
Variable Cost per unit 4.50 3.72 7.50 8.25 3.75 4.13 1.50 1.65
Total Variable Cost 6750000.00 6517500.00 4500000.00 3300000.00 1500000.00 1650000.00 750000.00 1567500.00
Fixed Cost 2970000.00 3690000.00 960000.00 960000.00 1560000.00 1560000.00 450000.00 1170000.00
Income 1080000.00 -327500.00 540000.00 -260000.00 540000.00 390000.00 0.00 -457500.00
Income Tax (50% of income) 540000.00 -163750.00 270000.00 -130000.00 270000.00 195000.00 0.00 -228750.00
Dividend (50% extra in new ) 300000.00 450000.00
Contribution margin 2.70 1.92 2.50 1.75 5.25 4.88 0.90 0.75
Break-even volume 1100000.00 1920446.10 384000.00 548571.43 297142.86 320000.00 500000.00 1560000.00
Break-even sales 7920000.00 10842289.96 3840000.00 5485714.29 2674285.71 2880000.00 1200000.00 3744000.00

Case-VII
Assumption
1. Volume of Product A reduced by 1/3rd and no change in Product C volume.
2. Sales price of Product C to be increased by 100 in NY%
3. Variable Cost per unit do not increased.
4. Fixed Cost increased by 60000 X 12 = 720,000 under product C
5. Income tax of 50% added to PBT
6. Dividend increased to 50% extra to add anniversary special dividend

Product Mix Product A Product B Product C

CY NY CY NY CY NY CY NY
Unit capacity 2000000.00 2000000.00
Acual Sales Volume 1500000.00 1750000.00 600000.00 400000.00 400000.00 400000.00 500000.00 950000.00
Unit Sales price 7.20 5.65 10.00 10.00 9.00 9.00 2.40 2.40
Total Sales Revenue 10800000.00 9880000.00 6000000.00 4000000.00 3600000.00 3600000.00 1200000.00 2280000.00
Variable Cost per unit 4.50 3.39 7.50 7.50 3.75 3.75 1.50 1.50
Total Variable Cost 6750000.00 5925000.00 4500000.00 3000000.00 1500000.00 1500000.00 750000.00 1425000.00
Fixed Cost 2970000.00 3690000.00 960000.00 960000.00 1560000.00 1560000.00 450000.00 1170000.00
Income 1080000.00 265000.00 540000.00 40000.00 540000.00 540000.00 0.00 -315000.00
Income Tax (50% of income) 540000.00 132500.00 270000.00 20000.00 270000.00 270000.00 0.00 -157500.00
Dividend (50% extra in new ) 300000.00 450000.00
Contribution margin 2.70 2.26 2.50 2.50 5.25 5.25 0.90 0.90
Break-even volume 1100000.00 1632743.36 384000.00 384000.00 297142.86 297142.86 500000.00 1300000.00
Break-even sales 7920000.00 9218002.53 3840000.00 3840000.00 2674285.71 2674285.71 1200000.00 3120000.00

Case-IX
Assumption
1. Volume of Product A reduced by 1/3rd and no change in Product C volume.
2. Sales price of Product C to be increased by 100 in NY%
3. Variable Cost per unit do not increased.
4. Fixed Cost increased by 60000 X 12 = 720,000 under product C
5. Income tax of 50% added to PBT
6. No Dividend increased to 50% extra to add anniversary special dividend

Product Mix Product A Product B Product C

CY NY CY NY CY NY CY NY
Unit capacity 2000000.00 2000000.00
Acual Sales Volume 1500000.00 1750000.00 600000.00 400000.00 400000.00 400000.00 500000.00 950000.00
Unit Sales price 7.20 6.95 10.00 10.00 9.00 9.00 2.40 4.80
Total Sales Revenue 10800000.00 12160000.00 6000000.00 4000000.00 3600000.00 3600000.00 1200000.00 4560000.00
Variable Cost per unit 4.50 3.39 7.50 7.50 3.75 3.75 1.50 1.50
Total Variable Cost 6750000.00 5925000.00 4500000.00 3000000.00 1500000.00 1500000.00 750000.00 1425000.00
Fixed Cost 2970000.00 3690000.00 960000.00 960000.00 1560000.00 1560000.00 450000.00 1170000.00
Income 1080000.00 2545000.00 540000.00 40000.00 540000.00 540000.00 0.00 1965000.00
Income Tax (50% of income) 540000.00 1272500.00 270000.00 20000.00 270000.00 270000.00 0.00 982500.00
Dividend (50% extra in new ) 300000.00 300000.00
Contribution margin 2.70 3.56 2.50 2.50 5.25 5.25 0.90 3.30
Break-even volume 1100000.00 1035685.65 384000.00 384000.00 297142.86 297142.86 500000.00 354545.45
Break-even sales 7920000.00 7196535.69 3840000.00 3840000.00 2674285.71 2674285.71 1200000.00 1701818.18

Multiproduct Breakeven Analysis Current Year Given by

Bill French
A B C Total
Units Sold 600000.00 400000.00 500000.00 1500000.00
Fixed Cost 960000.00 1560000.00 450000.00 2970000.00
Sales Price 10.00 9.00 2.40 7.20
Variable cost 7.50 3.75 1.50 4.50
Contribution margin 2.50 5.25 0.90 2.70
Contribution margin ratio 0.25 0.58 0.38 0.38
Break-even units 384000.00 297142.86 500000.00 1100000.00
Break-even Sales 3840000.00 2674285.71 1200000.00 7920000.00

Multiproduct Breakeven Analysis New Year

For the given product mix
A B C Total

Fixed Cost 960000.00 1560000.00 1170000.00 3690000.00

Sales Price 10.00 9.00 4.80 6.95
Variable cost 8.25 4.13 1.65 3.72
Contribution margin 1.75 4.88 3.15 3.22
Contribution margin ratio 0.18 0.54 0.66 0.46
Break-even units 548571.43 320000.00 371428.57 1144439.52
Break-even Sales 5485714.29 2880000.00 1782857.14 7952219.76

Case V
Assumptions
1. Fixed cost new 3,690,000
2. Selling price new
3. Variable cost new
4. Retention old-pretax 300000.00
5. Divident old pretax 600000.00

New Fixed cost 3690000.00

Divident old pretaxed 600000.00
Retention earning-Pretax 300000.00
New Variable cost 3.72
New Sales Price 6.95
All Other factors constant

Contribution Margin 3.22

Break-even volume 1423571.11
Break-even sales 9891785.56

Case VI
Assumptions
1. Variable cost no change
2. Unit sold new.
3. Selling price new.
4. All other factors constant

Variable cost No Change. 3.39

Total no of units Sold New. 1750000.00
Selling Price New 6.95
All Other factors constant

Contribution Margin 3.56

Break-even volume 491178.83
Break-even sales 3412991.18