Rehman Sugar Mills is well known for its refined sugar. In the year of 2013, it sold 35,000 bags containing 1.75 million kilograms of refined sugar at Rs. 2,250 each bag.
The variable production and operating costs for the year were;
a) Purchase cost of sugarcane is Rs.15 per kg;
b) Crushing process requires Rs.7 per kg;
c) Boiling the pulp needs Rs. 3 per kg;
d) Sugar refinement costs Rs. 2 per kg; &
e) Other variable operating expenses Rs. 9 per kg
Rent of the factory’s outlet for the year was Rs. 1.5 million per month. Depreciation of the company’s plant and other assets was Rs. 36.80 million per year. Misc. fixed operating expenses were Rs.16 million for the year.
For year 2014, it is expected that the sale price will remain the same. But, the demand will be increased by 10%. Accordingly, the variable costs will also be increased by 15%.
1. Break even point in units and value both for the current and next year. (3 Marks)
2. Income statements of both the years. (4.5 Marks)
3. If the mills need to earn net profit of Rs. 350,000 in the year of 2014, how many bags it needs to sell. (2.5 marks)
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Arslan , i am taking variable cost as 15+7+3+2=27 m i ryt?
Further about fixed cost
1.5 +36.80+16 All there are fixed or what are fixed cost?
per kg cost is 2250/50= Rs 45 per kg is it?
36 hai variable cost
and fixed cost?
Plzz full solution upload kr dy
ghalt kya tariq saab ne...dep ko ignore nhi karna
yr koi full solution e upload kr do..........vu walo
3rd part ka idea solution please share kr dain ?
Variable Cost: 15 + 7 + 3 + 2 + 9 = 36
Variable Cost = Rs. 36/unit
Total Variable Cost = 36 X 35,000 bags = 1,260,000
Rent of the factory’s outlet for the year was Rs. 1.5 million per month
pr month so multyply amount wid 12
Rent of the Factory = 1.5m x 12 = 18m
Depreciation of the Assets = 36.8m
Fixed Operating Expense = 16m
Total Fixed Cost = 70.8m = 70,800,000
Selling Price per Unit: 2,250
Total Units = 35,000
= 35,000 X 2,250
Total Sales (2013) = 78,750,000
Total Units = 35,000 X 10% = 38,500
= 38,500 X 2,250
Total Sales (2014) = 86,625,000
= Selling Price /Units – Variable Cost / Units
= 2250 – 36
2nd part ka solution upload kr dy
yeh fixed cost per unit kesy i??????
agar hum 70800000/35000 kren to answer will be 2022.85
but yeh 2250 per unit kesy i?????
wafa apne contribution margin per unit calculate krty hwy 2 trha k units use kiye hain.Rs.2250/bag hai or Rs.36/kg hai. so according to my point of view hme bag ko as a unit se krna hai .agr kg ko as a unit use krna b hai to b hme saling price ko b per kg use krna hoga na k per bag.
m i ri8?????????????
guide me if i m wrong