II. a. Computation of Tender price on the basis of Previous year's per unit cost: Under this situation, previous periods cost and output figures are available. Tender price is fixed by multiplying the quantity with previous periods per unit cost and adding the required percentage of profit. There are three different situations under this method. When there is no change in past cost and past percentage of profit. In this case a detailed probable cost sheet is prepared by multiplying previous period's cost of each unit with the quantity of tender. Profit is added at the same percentage of profits of the past period. b. When there is change in past cost, but no change in past percentage of profit: Here the cost of the tender is calculated by making necessary adjustments in the elements of cost. Same percentage of cost is added as profit to get tender price. c. When there is change in past cost and past percentage of profit: - Here the total cost tender is calculated by making necessary adjustments in the cost and the tender price is then calculated by adding the required percentage of profit. S49 Illustration II. The following is the Trading and Profit and loss account of XYZ Co. for the year ending 31" March 2011 in which half year 1000 refrigerators manufactured and sold. Trading and Profit & Loss Account Rs. 4,00,000 By sales To materials To wages To Manufacturing exp Rs. 80,000 1,20,000 50,000 1.50,000 To G/PC/D 4,00,000 4,00.000 By GP/b/d 1.50,000 To staff salaries "Selling Exp "General Exp "Rent & Taxes "N/P 60,000 30,000 20.000 10,000 30,000 1.50.000 SER 1.50.000 For the year ending 31" March 2012, it is estimated that: 1. The price of raw materials will increase by 20% on the previous year's level. 2. Rate of wages will rise by 5% 3. The output and sale will be 1.200 Refrigerators 4. Selling exp. Per unit will remain constant. 5. Manufacturing OH will rise in proportion to combined cost of material and wages 6. Other expenses remain unaffected by the rise in output. You are required to prepare an estimated cost sheet for the year 2012, showing the prices at which a refrigerator should be sold keeping a net profit of 10% on the selling price