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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Operating Expense treat hoga...
Rosali sis aap to mgt402 me bht fast hn.
2250 per bag hai jab k 36 per kg ... so either do it per kg or per bag.. to aap ko
ap ki variable cost 27 aye gi to ap ko
Per bag it would be 27 x 50kg=1350 per bag
Depreciation is also fixed cost...
MGT402 - Cost & Management Accounting Assignment No. 02 Due Date 11 Aug 2014
ab depreciation kahan gai?
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Sales = 35, 000 bags x Rs.2, 250
Sales = Rs.78, 750, 000
The variable production and operating costs for the year:
Purchase cost of sugarcane is Rs.15 per kg;
Crushing process requires Rs.7 per kg;
Boiling the pulp needs Rs. 3 per kg;
Sugar refinement costs Rs. 2 per kg; &
Other variable operating expenses Rs. 9 per kg
So, the variable cost = 15+7+3+2+9
Variable Cost = Rs.36
Variable Cost = Rs. 36 x 35, 000 bags
Variable Cost = 12, 60, 000
Rent of the factory’s outlet for the year = Rs. 1.5 Million / month
Rent of the factory’s outlet for the year = 1.5 Million x 12 months
Rent of the factory’s outlet for the year = Rs.18 Million
Depreciation, plant and assets = Rs. 36.80 million per year
Fixed Cost = Rent + Depreciation
Fixed Cost = Rs. 18, 000, 000 + 36.80 Million
Fixed Cost =
Misc. fixed operating expenses = Rs. 16 Million
In Year 2014:
Demand /increment = 10%
Variable Cost Increment = 15%
yeh variable cos per kg mn hy to variable cost=36 *1.75 million kilogram then= 63 million. am i right?
jb k fixed itni zyada value bn rhi hy to variable may be 63 million
Variable Cost: 15 + 7 + 3 + 2 + 9 = 36
Variable Cost = Rs. 36/unit
Total Variable Cost = 36 X 35000 = 1,260,000
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
PLEASE CONFIRM IS THIS RIGHT OR NOT?????????????????
hi i think it is right.
pr ap ny misc.fixed operating expense ko confirm kr k hi fixed cost mein add kea ha na?