Rohidas Patil Institute Of Management Studies

Mahavidhyalay Marg ,Navghar Gaon, Bhayander East,

Thane ,Maharashtra 401105.

NameNIRAJ TAWDE
Class FY.MMS
Roll No55
Q.1.Solution

Particulars Sales VariableCosts CM FixedCosts NetIncome

A 55000000 49500000 5500000 3000000 2500000

B 50000000 45000000 5000000 3300000 1700000

C 45000000 40500000 4500000 3000000 1500000

D 50000000 49500000 500000 3000000 -2500000

E 50000000 38250000 11750000 3450000 8300000

Q.2.Solution
a) Unit CM = 90000-40000/5000 units = $ 10 per unit

b) Net Income = 90000-40000-15000 = $35000

c) CM = 3000 units X $ 3 =$ 9000Sales - $

4000 = $9000
Sales = 9000+4000 = $ 13000

d) $ 13000- $ 4000 - Fixed Costs = $2000

$ 9000 - Fixed Costs = $ 2000
Fixed Costs = 9000-2000 = $ 7000

e) $ 50000- Variable Expenses - $ 20000 =$5000Variable

Expenses = 30000-5000 = $25000

f) Unit CM = 50000-25000/10000 units = $2.50

Q.3.Solution

a) CM Ratio = 100000-50000/100000 =50%

b) Net Income = 100000 - 50000 - 30000 = $20000

c) $ 200000 - Variable Expenses/ $ 200000 =30%

d) $ 200000 - $ 140000 - Fixed Costs =$5000Fixed Costs =

60000-5000 = $55000

e) CM - Fixed Costs = Net Income

CM - 25000 = $25000
CM = $ 25000

f) CM = Sales - Variable Expenses

50000 = 125000 - VariableExpenses
Variable Expenses = 125000 - 50000 = $ 75000
Q.4.Solution

a) Contribution Margin per unit = 10-6 = $4

b) Contribution Margin Ratio = 4/10 X 100 =40%

c) Break even Sales in units = 50000/4 = 12500units

d) Break even Sales in dollars = 12500 units X 10 = $125000

e) Target Income Sales in Units = 50000 + 4000 / 4 = 13500units

f) Target Income Sales in Units = 50000 / 4-15% ($10)

= 50000/2.5
= 20000 Units
Q.5.Solution

Target Income sales in units = $ 26000 + {6000/(1-0.4)} / 250-130

= 26000 + 10000 / 120
= 36000 / 120
= 300 units
Q.6. Solution
(a) part

Variable Cost $ Fixed Cost $

Direct Materials 6
Direct Labour 1 Factory Overhead 12000
Selling Expense 6
Total $ 13 Admin 16000

Total $ 28000

Break even point in units = 28000 / 20-13

=4000units

Break even point in dollars = 4000 units X $ 20

=$80000

(b) part

Let S = The selling price , then

Sales = Variable Costs + Fixed Costs + Net Income
3500 S = 7(3500) + 0.3 S (3500) + 28000 + 2.04(3500)
2450 S = $ 59640
S=$24.34
Q.7.Solution

(a)
Particulars $

Sales (260000 units @ $ 2 520000

(-) Variable Costs @ $ 1.75 455000

CM 65000

Fixed Costs 120000

NetIncome -55000

(b)
Number of Unit Sales = 120000+30000 / 2 - 1.75
= 150000 / 0.25
=600000units
Q.8.Solution

a) Break even point in Units = 30000 / 8 -5

= 10000 Units

Break even point in Dollars = 10000 units X 8

= $ 80000

b) Margin of Safety = 12000 units - 10000 units / 12000units

= 16.67 %

c) Particulars $
Sales 120000
(-) Variable Costs 15000 Units X $ 5 75000
CM 45000
Fixed Costs 30000
Net Income 15000

d) TTarget Income Volume = 30000 + 10000 / 8 -5

= 40000 / 3
= 13333 Units

e) Target Income Volume = 30000 / 8 - 5 - 10%(8)

= 30000 / 2.2
= 13636 Units

f) Break even in Units = 25000 / 8 -6

= 12500 Units
Q.9.Solution

a)
Average Contribution Margin per unit = 5 X 30% + 4 X 50% + 3 X 20%
= $ 4.10 per unit

Company break even point = 100000 / 4.10

= 24390 Units

Proportion of 30% of 24390 Units 7317 Units

Proportion of 50% of 24390 Units 12195 Units

Proportion of 20% of 24390 Units 4878 Units

b)
Average Contribution Margin per unit = 5 X 50% + 4 X 30% + 3 X 20%
= 4.30 per unit

Company break even point = 100000 / 4.30

= 23256 Units

Proportion of 50% of 23256 Units 11628 Units

Proportion of 30% of 23256 Units 6977 Units

Proportion of 20% of 23256 Units 4651 Units

Q.10.Solution

Schedule of Costs of Goods Manufactured

Particulars $

Direct Materials Used 25000

Direct Labour 52000

Factory OH 30000

Total Manufacturing Costs 107000

(+) Beginning WIP 5000

(-) Ending WIP -6000

COGS Manufcatured 106000

Q.11.Solution

The answer is Yes.

The company can add to its total profits by accepting this order
even though the price offered is below the unit factory cost.

Without Order With Order

Particulars PerUnit 90000units 100000units Difference

Sales 2 180000 192000 12000

(-) VC 1 90000 100000 10000

CM 1 90000 92000 2000

(-) FC 0.5 45000 45000 -

NetIncome 0.5 45000 47000 2000

Q.12.Solution

a)
Contribution Margin per hour

Product V $ 6 per unit X 1/3 hour $ 18 per hour

Product W $ 8 per unit X 1/2 hour $ 16 per hour

2000hoursX$18perhour=$36000

b)

Product V = 4500 units X $ 6 per unit = $ 27000

Q.13.Solution

Let X = No. Of units of product X to be produced

Let Y = No. Of units of product Y to be produced

$ 50 X + $ 90 Y
Subject to 2X + 1Y <300
4X + 6Y <500
3X + 2Y <250 X, Y
>0
 Q.14.Solution

Process Costing
Raw Materials Conversion Added
Materials Conversion
OP Bal 9600 5575
(+) Material 368600 350900
Total 378200 356475 734675
Equivalent F/G
Completed Units 4800 100% 100%

Equivalent Units 4800 4800

Equivalent Closing WIP 400 40% 25%

Equivalent Closing WIP Units 0 0

Total Equivalent Units 4800 4800

Cost Per Unit 78.79166667 74.265625 153.0572917

Cost Completed Units 734675

Cost Closing WIP 0 0 0

734675
Q.15.Solution

Cost o fRaw Materials

Particulars RM L OH Total
OP Bal 92000 21000 37000 150000
(+) RM 851000 330000 665000 1846000
Total 943000 351000 702000 1996000 1996000
Equivalent Units
Closing Bal 80000 50% 25% 25%
40000 20000 20000
Completed units 370000 100% 100% 100% 28203250
0 0 0
Total Completed units 40000 20000 20000
Cost Per Unit 23.575 17.55 35.1 76.225

WIP Cost 943000 351000 702000 1996000 30199250

58402500