Harsh Electrical: Analyzing cost in search of profit

• Prepare a cost of goods sold statement for Harsh Electrical
• Considering Harsh Electrical's product and period costs, create a projected income statement for the calendar year 2014.
• Calculate Harsh Electricals' Break Even Point (BEP) in terms of units and volume
• Calculate the number of units that Harsh Electricals must sell to match the level of profit earned in financial year 2010-2011. 

Sales EXHIBIT 1: HARSH ELECTRICALS INCOME STATEMENTS, 2008-09 TO 2012-13 (IN *) Cost of Goods Sold Gross Profit Marketing and Promotional Expenses 2008-09 2009-10 2010-11 2011-12 2012-13 3,960,000 4,560,000 5,052,000 4,335,000 4,050,000 2,991,000 3,285,000 3,713,220 3,208,000 3,120,000 969,000 1,275,000 1,338,780 1,127,000 930,000 96,000 156,000 170,000 186,000 175,000 73,000 75,000 84,000 64,000 93,000 151,000 General and Administrative Expenses 66,000 72,000 Repair and Replacement Costs 22,000 56,000 Earnings before Interest, Depreciation, 785,000 991,000 1,031,780 773,000 520,000 and Amortization Depreciation and Amortization 54,000 54,000 54,000 54,000 54,000 Earnings before Interest and Tax 731,000 937,000 977,780 719,000 466,000 Interest 0 0 0 0 0 Profit before Tax 731,000 937,000 977,780 719,000 466,000 Tax 87,720 112,440 117,334 86,280 55,920 Net Income 643,280 824,560 859,846 632,720 410,080 Note: INR - Indian rupee; US$1 = 39.94 on April 1, 2008; US$1 = 54.35 on April 1, 2013. Source: Company records. EXHIBIT 2: DETAILS OF FIXED ASSETS FOR HARSH ELECTRICALS Asset Cost (in **) Life (in years) Salvage Value (in) Plant and Machinery 320,000 5 20,000 Workshop Furniture and Fixtures 40,000 10 NIL Office Furniture and Fixtures 60,000 10 NIL Computer and Software 80,000 5 NIL Note: INR - Indian rupee; US$1 = 54.35 on April 1, 2013. Source: Company records.