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Travis Company has fixed costs of Rs
Travis Company has fixed costs of Rs.625,000 per year and variable costs of Rs.7.50 per unit. Its product sells for Rs. 12.50 per unit. Full capacity is 200,000 units:
- Compute the contribution per unit
- Compute the break-even point in (i) sales amount and (ii) units.
- Compute the number of units the company must sell if it wishes to have net income of Rs. 300,000
(Part B)
1. Following are cost records of product X of SV Ltd., for the year ending 31st March 2019:
|
Particulars |
Amount (Rs.) |
|
Sales (100,000 units) |
12,00,000 |
|
Raw material (01.04.18) |
60,000 |
|
Raw material (31.03.19) |
43,000 |
|
Material purchased |
185,000 |
|
Freight paid on raw material |
8,000 |
|
Direct wages |
176,000 |
|
Factory overheads |
122,000 |
|
Rent paid |
36,000 |
|
Office salary |
14,000 |
|
Selling expenses |
67,000 |
The company has opening inventory of work in progress of Rs. 58,000 and finished goods (20,000 units) of Rs. 200,000.
On 31.03.19, the company has inventory of work in progress worth Rs. 78,000 and finished goods (25,000 units) worth Rs. 276,000.
Prepare the Cost Sheet for year ending 31.03.2019, and determine the profit margin that the company is earning.
Expert Solution
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