Question

(b) Dash Pro Sdn. Bhd. manufacturer of car dashboard has anal cost data as given below, Calculate the fixed cost, variable cast and the selling price for a daslıboard). ITEMS RM Raw material Direct labor Direet Expchiscs Plan manager and statt Utilities for plant Taxes and Insurance Plant and equipment Depreciation Warehouse expenses Office Utilities Engineering salaries Plant Engineering expenses Plant Administrative Staff salaries Sales staff, salaries and commissions 2150000 950000 60000 180000 70000 50000 120000 60000 10000 90000 30000 120000 100000 . Total unnual sales 5000 units Profit Margin 30 % (12 marks) (C) Calculate the break-even point for this dashboard at which the sales begin to gcpcratc profit. (4 marks)

Answer 1

b) calculation of fixed cost:-

Plant and manager and staff = 1,80,000

Taxes and insurance = 50,000

Plant and equipment depriciation = 1,20,000

Ware house expenses (assumed to be rent)= 60,000

Office Utlities = 10,000

Engineering salary plant = 90,000

admin staff salaries = 1,20,000

Total fixed cost = 6,30,000/-

ii) calculation of variable cost:-

Raw material = 21,50,000

Direct labor= 9,50,000

direct expense = 60,000   

Utilites for plant= 70,000

Engg Expense plant = 30,000

Sales staff,comision=1,00,000

Total Variable Cost =33,60,000/-

iii) Calaculation of Selling price for dashboard:-

Total Variable Cost = 33,60,000

Total Fixed cost = 6,30,000

Total cost = 39,90,000

+ Profit Margin(30% on total sales) = 30/70*39,90,000

(30% is profit margin on sale, let sp be 100, then profit will be 30, so cost is 70.. hence 30/70 will be profit % on total cost)

Total Sales Amount = 57,00,000

Sales Units = 5000

Selling price per unit = 57,00,000/5000

S.P. per unit = 1140/-

c) calculation of break even point:-

Break even point (units)= Fixed cost/contribution per unit

fixed cost = 6,30,000/- (from b)

contribution:-

selling price :- 1140 (from b)

variable cost per unit:- 33,60,000/5000= 672

conteibution per unit = selling price per unit - variable cost per unit

= 1140 - 672 = 468

break even point (units) = 6,30,000/468 = 1346.15 rounded off to 1347 units.

break even point (sales) = 1346.15*1140= 15,34,615/-

Conclusion:-

b) total variable cost = 33,60,000

total fixed cost = 6,30,000

selling price = 1140

c)

Break even point (units) = 1347 units (rounded off)

Break Even point (sales) = 15,34,615/- (rounded off)