As Given | Figures | Index |
Selling Price (in $) | 82 | A |
Variable Cost (in $) | 47 | B |
Fixed Cost (in $) | 25 | C |
Estimated Unit Sales | 19,000 | D |
Charge on Inventory | 5% | D1 |
Requirement 1
Units | |||||
Index | Particulars | Formula | 19,000 | 26,600 | 28,500 |
E | Revenues (in $) | Units X (A) | 15,58,000.00 | 21,81,200.00 | 23,37,000.00 |
F | Cost of Goods Sold (in $) | Units X (B+C) | 13,68,000.00 | 19,15,200.00 | 20,52,000.00 |
G | Production of Volume Variance* (in $) | (Units - D) X C | 0.00 | -1,90,000.00 | -2,37,500.00 |
H | Net cost of goods sold (in $) | F-G | 13,68,000.00 | 17,25,200.00 | 18,14,500.00 |
I | Gross Margin (in $) | E-H | 1,90,000.00 | 4,56,000.00 | 5,22,500.00 |
* Production Volume Variance - It is given that the Fixed cost is per semester and is allocated based on estimated sales. While calculating the Cost of Goods Sold (F), unit rate of fixed cost is used for all the three level of unit productions. However, the fixed cost will not increase throughout the semester. Hence the difference is calculated as volume variance.
Requirement 2
Units | |||||
Index | Particulars | Formula | 19,000 | 26,600 | 28,500 |
Beginning Inventory (in Units) | As Given | 0.00 | 0.00 | 0.00 | |
Production (in Units) | As Given | 19,000.00 | 26,600.00 | 28,500.00 | |
Sales (in Units) | D | 19,000.00 | 19,000.00 | 19,000.00 | |
J | Ending Inventory (in Units) | Units - D | 0.00 | 7,600.00 | 9,500.00 |
K | Cost per book (in $) | H / Units | 72.00 | 64.86 | 63.67 |
L | Cost of ending inventory (in $) | J * K | 0.00 | 4,92,914.29 | 6,04,833.33 |
Requirement 3
Units | |||||
Index | Particulars | Formula | 19,000 | 26,600 | 28,500 |
Gross Margin | I | 1,90,000.00 | 4,56,000.00 | 5,22,500.00 | |
M | Ending Inventory charge | I X D1 | - | 24,645.71 | 30,241.67 |
N | Adjusted Gross Margin | I - M | 1,90,000.00 | 4,31,354.29 | 4,92,258.33 |
Excess Production | (Units - D) / D | 0% | 40% | 50% |
For the below two requirements, the question is not so clear and the drop down list is not visible to be answered for:
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