Homework Answers
| Particular | Amount | |
| Revenue | 5,000,000 | |
| Variable cost | 2,400,000 | |
| Contribution | 2,600,000 | |
| Fixed Cost | 1,600,000 | |
| 2 | Profit | 1,000,000 |
| Assets | 6,000,000 | |
| 1 | ROI | 16.67% |
| Calculation of Desired Contribution | ||
| Particular | Amount | |
| Assets | 6,000,000 | |
| Desired ROI 18% | 1,080,000 | |
| Add: Bonous | 100,000 | |
| Add: Fixed Cost | 1,600,000 | |
| Desired Contribution | 2,780,000 | |
| Calculation of Number of units to be sold | ||
| Sales per unit (5000000/100000) | 50 | |
| Variable cost per unit (2400000/100000) | 24 | |
| Contribution per unit | 26 | |
| 3 | Desired Unit | 106923.0769 |
| 106924 (round off) | ||
| Alternative when the fixed cost is deffered | ||
| Particular | Amount | |
| Assets | 6,000,000 | |
| Desired ROI 18% | 1,080,000 | |
| Sales Revenue | 5,000,000 | |
| Less: Variable cost | 2,400,000 | |
| Contribution | 2,600,000 | |
| Less: Bonous | 100,000 | |
| Less: Desired Profit | 1,080,000 | |
| Amount Available for Fixed Cost | 1,420,000 | |
| Already Fixed cost | 1,600,000 | |
| 4 | Reduction in fixed cost | 180,000 |
| Alternative when the fixed asset to be reduced | ||
| Particular | Amount | |
| Sales Revenue | 5,000,000 | |
| Less: Variable cost | 2,400,000 | |
| Contribution | 2,600,000 | |
| Less: Bonous | 100,000 | |
| Less: Fixed Cost | 1,600,000 | |
| Return | 900,000 | |
| Required Fixed Asset @ 18% | 5,000,000 | |
| Already have fixed cost | 6,000,000 | |
| 5 | Reduction in fixed cost | 1,000,000 |
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