You are here:

# Human Resources/MS-4 MBA

Question

Q. An Analysis of S Ltd. cost records give the following information.
Variable Cost Fixed Cost
(% of Sales) Rs.
Direct Material 32.8% -
Direct Labour 28.4 -
Budgeted sales for the next year is Rs. 18, 50,000. You are required to determine:
(a) Break even sales value
(b) Profit at the budgeted sales volume
(c) Profit if actual sales: (i) drop by 10% (ii) increase by 5% from the sale

SOLUTION:
Total variable  cost  as % of  sales
=32.8+28.4+12.6+4.1+1.1= 79% or .79
p/v ratio=1-.79=.21 or 21 %
total fixed  cost=1,89,900+58400+66700 =rs 315,000
==============================================================

[a]          bep=F          31,500
------------------------------          ¬---------------      =  RS  15,000,000
P/V ratio          0.21
=============================================================================
[b]  profit=budgeted contribution- fixed cost
=budgeted sales   x p/v ratio –fixed cost
=18,50,000x .21-315,000==rs 73,500
=========================
[c] [1]revised sale after 10%drop= 18,500,000x 90/100= rs  16,65,000
Profit = 16,65,000x.21-315,000=rs 34,650

[c] [2]revised sale after    5 % increase= 18,500,000x 105 /100= rs  19,42,000
Profit = 19,42,000x.21-315,000=rs 92,925
###############################################
Questioner's Rating
 Rating(1-10) Knowledgeability = 10 Clarity of Response = 10 Politeness = 10 Comment Thank you very very much Leo :) Really appreciate your quick help

Human Resources

Volunteer

#### Leo Lingham

##### Expertise

human resource management, human resource planning, strategic planning in resource, management development, training, business coaching, management training, coaching, counseling, recruitment, selection, performance management.

##### Experience

18 years of managerial working exercise which covers business planning , strategic planning, marketing, sales management,
management service, organization development

PLUS

24 years of management consulting which includes business planning, corporate planning, strategic planning, business development, product management, human resource management/ development,training,