No Spac... Heading 1 Heading 2 N Title Paragraph Replace Select Styles s Editing Question 6. The following information has been provided to you by Havells Inc. regarding their costs and margins for the month of August, 2019. With the help of this information, solve the following questions: (10 Marks) Income Statement for August, 2019 Sales (2000 units) S 1,000,000 Variable Expenses $ 40,000 Contribution Margin Fixed Expenses S 25,000 Net Income a) Find the Break Even Point (in Dollars) for Havells Inc. [2] b) The Sales manager for Havells is not happy with the umts sold for the month of August and he is proposing a new strategy by slashing the price of a single unit by $15 and increasing the advertising budget by a total of $20,000 to sell higher number of units. If this strategy is implemented, sales manager is certain that the sales will boost by 30% than what they sold in August 2019. Perform CVP analysis and suggest whether this strategy should be implemented or not. [6] a) Calculate the Margin of Safety for Havells Inc. for August 2019, [2] o Question 5. XYZ Co. Produces a single product. The activity base for Labour Variance and Variable Manufacturing Overhead is Labour Hours. The standard costs and relevant information has been provided below: (11 Marks) Standard Costs Total Direct Material Purchases 4 Pounds for 1 unit $6.5 per pound Direct Labour 15 hours to produce 1 unit Rate offered is $ 17 per hour Variable Manufacturing Overhead number of hours @ predetermined overhead rate Total Standard variable cost per unit Summary of Estimated Annual Figures Estimated Direct Labour Hours Estimated Total Manufacturing Overhead Cost Estimated Variable Overhead Cost 6,000 S 65,000 S6 per Direct-Labour Hour Data for Month of April Total Units Produced 3000 Units Material Purchased D. For arch dlaglian Data for Month of April Styles Editing Total Units Produced 3000 Units Material Purchased 14000 Pounds at $ 5.5 per pound Material Used in Production Direct Labor Hours: 5000 Hours at $ 16 per hour Variable Manufacturing Overhead Cost 13000 Pounds = $ 70,000 1 Calculate the Pre-determined Overhead Rate (Standard Rate for Variable Overhead) 12 Marks] ii) Compute the following Variances 19 Marks] a. Direct Material Variance Materials Price Variance Focus 1) Calculate the Pre-determined Overhead Rate (Standard Rate for Variable Overhead) [2 Marks] 11) Compute the following Variances: 19 Marks] a. Direct Material Variance i. Materials Price Variance ii. Materials Quantity Variance 111. Spending Variance b. Direct Labour Variance i. Labour Rate Variance 11. Labour Efficiency Variance 111. Spending Variance c. Variable Manufacturing Overhead Variance 1. Variance Manufacturing Overhead Rate Variance 11. Variance Manufacturing Overhead Efficiency Variance 111 Spending Variance w
