Old MathJax webview

Old MathJax webview

need project note

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updated

seront semester C 48 10 5.000 090 aximum (unit) Minimum (unit) B 35 2. Uns Variable Overhead Costento sector Cort the Company has acted the following used misom denne for each product D Toy 4.000 5.000 500 1.000 What is the estimated profit for the year as per the company's Production Plan? What would be the plan for Maximum Profit? What is the Estimated Profit as per the plan suggested by you in (2) above? Solution: It is given that Skilled Labour Hours are limited to 14,000 hours. Hence, Dis the my Factor D E Total Particulars Sale Price p. 180 110 95 270 792 2 Variable Costs pu. 40 60 Materials 120 124 32 16 720 12 Labour 10 112 28 10 VOH (50% of Labour) 16 25 26 264 2.90 50 Sub Total 142 3. 46 790 745 Contribution p.u. 750 735 1.07 DLH required pu. 0.80 0.80 0.67 5. Contribution per DLH 767.50 43.13 62.50 756.25 * 52.50 1 v Ranking based on IV III II 7. 500 uts 500 uts Minimum Demand Quty 1,000 uts 1,000 uts 1,000 uts 8. Maximum Demand Quty 4,000 uts 5,000 uts 6,000 uts 6,000 uts 4,000 uts 9. 667 hrs Minimum Time required 3,468 hrs 800 hrs 667 hrs 534 hrs 800 hrs 10. Maximumn Time required 5,334 hrs 4,800 hrs 3,333 hrs 22,533 hrs 4,280 hrs 4,800 hrs 11. Production Quantity as per 3,000 uts 4,000 uts 4,000 uts 3,000 uts 2,400 uts Company's Original Plan 12. Contribution for above * 1,05,000 32,00,000 31,80,000 31,38,000 32,16,000 8,39,000 13. Fixed Costs (See Note) 33,33,000 "14. Profit as per Company's 5,06,000 Original Plan 15. Optimum Time Allocation: Minimum 667 hrs 800 hrs 800 hrs 533 hrs 667 hrs 3,468 hrs Nil Balance subject to limit 4,000 hrs Nii 1,865 hrs 4,667 hrs 10,532 hrs Total Time Allocation 667 hrs 4,800 hrs 2,666 hrs 533 hrs 5,334 hrs 14,000 hrs 5. Optimum Production 1,000 uts 6,000 uts 3,331 uts 500 uts 4,000 uts Quantity Contribution as per 35,000 73,00,000 1,49,895 323,000 33,56,000 8,67,899 Optimum Plan Profit as per Optimum Plan 75,34,89 Hte: Total Fixed Costs= (3,000x2 15)+(4,000x218)+(4,000x718)+ (3,000x724)+(2,400x730) = 33,33,000 9.99 M 93 Note: ema orofit excu Max AA 10. Key Factor - Production Decision - Department-wise Ranking & Impact of Training (6) $ Padhu domu Students' Handbook on Strategic Cost Management & Performance Evaluation - CA Final Products W-1 and W-2 are produced by wolders in the Welding Department whereas Products P-1 and P2 are produced by Krishna Engineering Company is engaged in producing for products through operations af welding and pressing departments. in their own department. press operators in the Pressing Department. Due to specific skill requirements, the welders and press-operators can only work ) W-2 P-1 5 77 732 4 33 1,800 units P-2 2 69 44 24 33 2,200 units The following is the relevant data in respect of the products Product W-1 Hours required per unit 4 4 Selling Price per unit 48 50 Direct Material Cost per unit 7 18 22 Direct Labour hourly Rate 34 74 Variable Overhead Rate per unit 2 32 Maximum demand to be met 2,000 units 2,500 units Welding and Pressing Departments respectively. The Company incurs 50,000 per annum towards Fixed Costs. The maximum available hours are 20,000 and 16,000 hours for jobs so that excess demand of any of the products can be met. This decision will increase the burden of Fixed Costs by 5,000 The Production Manager suggests that the welders and press-operators can be trained to perform both welding and pressing per annum. Prepare the Profitability Statement for optimum product-mix and recommend with reasons and appropriate workings whether it is advisable to train the welders and press-operators as suggested by the Production Manager. Solution: 1. Optimum Product Mix and Profit before Training Department Welding Dept Time Available 20,000 hours Product W-1 W-2 (a) Selling Price per unit 348 50 (b) Direct Material Cost per unit 18 22 (c) Direct Labour Costs per unit (at 4 per hr) 4x4=216 4x4=16 (d) VOH per unit (given) 2 2 (e) Total Variable Costs per unit (b+c+d) 36 40 Contribution per unit (a - e) 12 310 (9) Machine hours required per unit (given) 4 hours 4 hours (h) Contribution per m/c hour (f = 9) 13.00 2.50 (1) Ranking (Department-wise) I II 6) Minimum Demand to be met 2,000 units 2,500 units (k) Time required for Min. Demand (g xj) 8,000 hrs 10,000 hrs P-1 77 3 32 5x4=20 3 355 22 5 hours 34.40 II 1,800 units 9,000 hrs Pressing Dept 16,000 hours P-2 369 744 2x4=28 3 55 14 2 hours 7.00 2,200 units 4,400 hrs (1) Time used towards minimum Demand (m) Balance Time Available (n) Product to be produced (based on Rank) (o) Number of additional units produced 18,000 hours 20000 - 18000= 2,000 hrs W-1 2,000 = 4 = Nil 500 units 2,500 units 2,500 units 30,000 325,000 13,400 hours 16000 - 13400= 2,600 hrs P-2 Nil 2,600 = 2 = 1,300 units 1,800 units 3,500 units 39,600 349,000 (p) Total Production Quantity (i + o) (9) Total Contribution earned (p