Essay About S.P-V.C And Total Sale

Variable Costs
Essay Preview: Variable Costs
Report this essay
SELLING PRICE/UNIT ($)
4,350
3,850
Answer 4.
PER UNIT Cost
FOR Producing – 3000 UNITS
FOR Producing – 3500 UNITS
Selling 1000 units in regular market
Selling 1000 units in Foreign market
COST DATA
Rs.
Rs.
Rs.
Sales
4,350,000
Variable costs
1,795,000
VARIABLE COSTS:
Variable cost
2,070,000
Shiping Fixed price per unit
410
DIRECT MATERIAL
550.00
1,650,000
1,925,000
x=P+TFC/(S.P-V.C)
Contribution margin
2,280,000
Fixed Markiting cost
22,000
DIRECT LABOUR
825.00
2,475,000
2,887,500
Net profit
850,000
Total fixed price
1,092,000
VARIABLE OVERHEAD
420.00
1,260,000
1,470,000
Total Sale
3,737,000
VARIABLE MARKETING
275.00
825,000
962,500
Selling price per unit
3,737
Remove Variable & Fixed market price as the selling is happening outside domestic.
Total Variable costs
2,070.00
6,210,000
7,245,000
FIXED COSTS:
Answer 5.
Fixed OVERHEAD
660.00
1,980,000
1,980,000
Unit to be sold
200
Fixed Marketing cost
770.00
2,310,000
2,310,000
Price at which to be sold at variable cost per unit
2,070
Assuming only Variable cost is incurred.
Total Fixed costs
1,430.00
4,290,000
4,290,000
Total unit manufacturing cost (5+6+7+11)
2,455.00
7,365,000
8,592,500
Answer 6.
Total Costs (Variable + Fixed)
3,500.00
10,500,000
11,535,000
Ans 2 -Total Cost has increased due to increase in Variable cost.
PER UNIT Cost
Total Cost for producing 2000 units
COST DATA
Rs.
Contribution Margin /unit
2,280
1,780
DIRECT MATERIAL
550.00
Total Contribution Margin
6,840,000
6,230,000
DIRECT LABOUR
825.00
Break even volume (units)
1,882
VARIABLE OVERHEAD
420.00
Break even Sales ($)
8,184,868
VARIABLE MARKETING
220.00
Cost cut by 20%
Total Sales
13,050,000
13,475,000
Ans 2 – Sales has increased
Total Variable costs
2,015.00
Net Profit
2,550,000
1,940,000
Ans 2 – Profits has declined by 6% due to high variable costs.
FIXED COSTS:
%Margin
Fixed OVERHEAD
462.00
1,386,000