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PRODUCTION/OPERATIONS MANAGEMENT (MGT613)
ASSIGNMENT NO.1
FALL2020
Description:
Amna Sports Company deals in manufacturing of sports equipments which are not only supplied
across the country but are also exported abroad. The firm is currently operating at three different
locations. It has future plans of consolidating its assembly of production at a single location. The
proposed location will have a fixed monthly cost of 420,000 per month and a variable cost of Rs.
30 per unit. The selling price of each unit is Rs. 70 per unit.
Requirements:
A. What will be the Total cost, Total Revenue and Total Profit for monthly volumes of
following production? (Marks: 3+3)
1. 10,000 Units
2. 15,000 Units
B. What would be the breakeven point? (Marks: 4)
Note: Do mention the formulas along with calculations to get good grades.
Important Note:
24 hours extra / grace period after the due date is usually available for assignment to
overcome uploading difficulties. This extra time should only be used to meet the
emergencies and above mentioned due date should always be treated as final to avoid any
inconvenience.
Other Important Instructions:
Deadline:
• Make sure to upload the solution file before the due date on VULMS.
• Any submission made via email after the due date will not be accepted.
Formatting guidelines:
• Use the font style “Times New Roman” or “Arial” and font size “12”.
• It is advised to compose your document in MS-Word format.
• You may also compose your assignment in Open Office format.
• Use black and blue font colors only.
Referencing Guidelines:
• Use APA style for referencing and citation. For guidance search “APA reference
style” in Google and read various websites containing information for better
understanding or visit http://linguistics.byu.edu/faculty/henrichsenl/apa/APA01.html
Rules for Marking
Please note that your assignment will not be graded or graded as Zero (0), if:
• It is submitted after the due date.
• The file you uploaded does not open or is corrupt.
• It is in any format other than MS-Word or Open Office; e.g. Excel, PowerPoint, PDF
etc.
• It is cheated or copied from other students, internet, books, journals etc.

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Replies to This Discussion

MGT613 ASSIGNMENT NO.1 FALL2020

 

Description:

 

Amna Sports Company deals in manufacturing of sports equipments which are not only supplied across the country but are also exported abroad.

The firm is currently operating at three different locations.

 It has future plans of consolidating its assembly of production at a single location.

 The proposed location will have a fixed monthly cost of 420,000 per month and a variable cost of Rs. 30 per unit. The selling price of each unit is Rs. 70 per unit.

Requirements:

 

  • What will be the Total cost, Total Revenue and Total Profit for monthly volumes of following production? (Marks: 3+3)
  • Q= 10,000 Units Produced
  • Q=15,000 Units Produced

 

 

 

 

 

Fixed cost, FC = Rs. 420,000 per month

Variable cost, VC = Rs. 30 per unit

Selling price, R = Rs. 70 per unit

 

  • Q= 10,000 Units Produced

 

  • Total Cost, TC  = FC  + TVC
  • Total Revenue, TR = R * Q
  • Total Profit, TP  = TR-TC

 

 

   TVC = Q * VC/unit

            = 10,000 * 30                  = 300,000

           

  • Total Cost, TC  =  FC  + TVC

                            =   420,000 + 300,000      = Rs. 720,000

 

  • Total Revenue, TR = R/unit * Q

    =  70 * 10,000

   =   700,000

 

  • Total Profit, TP  = TR-TC

                                = 700,000 – 720,000

                               =  - 20,000 (Loss)

                          

 

2) Q=15,000 Units Produced

 

 

  • Total Cost, TC  = TFC  + TVC
  • Total Revenue, TR = R * Q
  • Total Profit, TP  = TC- TR

 

 

   TVC  = Q * VC/unit

            =  15,000 * 30                  = 450,000

           

  • Total Cost, TC  =  FC  + TVC

                                  =   420,000 + 450,000      = Rs. 870,000

 

  • Total Revenue, TR = R/unit  * Q

     = 70 * 15,000

     =   1,050,000

 

  • Total Profit, TP  = TR- TC

                                = 1,050,000 -870,000

                               =   180,000 (Profit)

 

 

 

 

 

 

 

  • What would be the breakeven point? (Marks: 4)

 

The point at which Profit =0 is called breakeven point

 

QBEP = FC/ R-VC

         = 420,000/ 70-30

 

          = 10,500

 

 

 

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