p37 Statement Showing Computation of Profit If Salesman's Proposal is Adopted Particulars R) 5,72,000 (i) Sales (500000 x 110% x 104%] (ii) Variable Cost: Direct Material (250000 x 110% x 98%] Direct Labour (100000 x 110% x 98%] Variable overheads (40000 x 110% x 98%] 2,69.500 1.07,800 43,120 4,20,420 (i) Contribution li- ii] (iv) Fixed Cost [60000 x 98% (v) Profit [ii-iv] 1,51,580 58,800 92.780 % of profit on Capital Employed = 92.780 4,00.000 x100 100) 23.195% From the above computation, it was found that the percentage of profit is 23.195% on Capital Employed by adopting the sales manager's proposal which is just more than 23% of expected, therefore the proposal can be adopted. Illustration 10 A glass Manufacturing company requires you to calculate and present the budget for the next year from the following information, 33,00.000 Sales: Toughened glass Bent toughened glass direct Material cost 5,00,000 60% of sales 20 workers @150 p.m. direct Wages Factory Overheads: Indirect Labour: Works Manager 500 per month Foreman 400 per month 2% on sales 712,000 5,600 Stores and spares depreciation on machinery Light and power Repairs and maintenance other sundries Administration, selling and distribution expenses 8,000 10% on direct wage *14,000 per year