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PLANT - 1 PLANT- 11 Capacity operation 100% 60% Sales (R) 6.00.00.000 2,40,00.000 Variable costs () 4,40,00,000 1,80,00,000 Fixed Costs() 80,00.000 40,00,000 You are required to calculated for the consideration of the Board of Directors (a) What would be the capacity of the merged plant to be operated for the purpose of break-even? (b) What would be the profitability on working at 75% of the merged capacity. p22 Statement showing computation of Breakeven of merged plant and other required information Rin lakhs) Sr. No Plant Before (100%) After (100%) Merged Plant (100%) Particulars Plantil Before Atter (100%) (60%) 240 400 Sales 600 600 1000 440 440 180 300 740 160 160 60 100 260 (ii) Variable cost (iii) Contribution (iii) (iv) Fixed Cost (v) Profit (iii-IV) 80 80 40 120 40 20 80 80 60 140 (a) Breakeven sales of merged plant = (120 x 1,000) / 260 = 461.5384615 lakhs For 1.000 - 100% For 461.5384615-2 = (100 / 1000) X 461.5384615 = 46.15384615% (b) Sales at 75% capacity = 1,000 X (75/100) = 750 lakhs Profit = (750 x 0.26) - 120 = 75 Lakhs Problem 28 The particulars of two plants producing an identical product with the same selling price are as under: PLANTA PLANT-B Capacity utilisation 70% 60% in lakhs) in lakhs) Sales 150 90 Variable Costs 105 75 Fixed costs 30 20 It has been decided to merge plant B with Plant A. The additional fixed expenses involved in the merger amount to is 2 lakhs. Required: 1. Find the break-even-point of plant A and plant B before merger and the break-even point of the merged plant. 2. Find the capacity utilisationsation of the integrated plant required to eam a profit of 18 lakhs. 2018