PLEASE WORK ON YOUR CASE ANALYSIS 2 AS PER THE FOLLOWING GUIDELINE

1.Analysis of various expenses:

a)Please calculate totalVariable Expenses(find per unit variable cost).

b)CalculateTotal Yearly Fixed Expenses(please be careful while calculating Fixed Expenses. If your fixed expenses are not calculated correctly, the Break-Even-Point will not be correct)

c)Calculate the amount ofTotal Initial Investment.

FOR THE ABOVE REQUIREMENTS, PLEASE GO THROUGHUNIT 1 STUDY MATERIALSESPECIALLY DISCUSSION PROBLEMS WITH ANSWER: FIXED AND VARIABLE EXPENSES.

REMEMBER PLEASE IF YOUR VC PER UNIT AND TOTAL FC ARE NOT CORRECT THE BEP AND REO WILL SHOW A WRONG RESULT. SO PLEASE TRY TO CALCULATE THE CORRECT FAC AND VC

2.Break-Even-Point:

Based on the above expenses analysis using the BEP (You already studied the chapter CVP Analysis) formula please calculate Break-Even-Point.

Please draw aCVP Chartand show the BEP point in that chart

DRAW A BEP CHART

GIVE A BRIEF DESCRIPTION OF THE CHART WHICH SHOULD INCLUDE THE FOLLOWING.

A) TOTAL AMOUNT OF FIXED COSTS IN COSTS LINE

B) TOTAL VARIABLE COSTS IN COST LINE

C) THE POINT WHERE THE VARIABLE COSTS INTERSECTS FIXED COSTS

D) THE INDICATION OF THE BEP POINT

3.Target Income:

In this section please apply the formula (Target Income studied in CVP analysis chapter) to find units to be produced to attain a targeted income of 2 million

(How many bricks need to be sold to earn a targeted income of Rs 2 million per year?)

FOR THE ABOVE REQUIREMENTS, PLEASE GO THROUGHUNIT 4 STUDY MATERIALSESPECIALLY DISCUSSION PROBLEMS WITH ANSWERS - BEP & CVP ANALYSIS

4.Return on Investment (ROE)

In this section, please calculateOperating Profit on Different Stimulated Volume.Please find the ROE in %. In the different volume of sales. For Example, you may calculate profit on THREE different volume like

Sales in 'ooo bricks240032004000

Capacity utilization60%80%100%

Please calculate revenue as per the price given in your question (Rs 7,000 per '000 bricks). Similarly, calculate the variable cost (Rs 4,500 per '000 brick).

Then find out the contribution margin and profit under each volume of sales.

Finally, calculate the ROE of equity Rs. 6 million.

FOR THE ABOVE REQUIREMENTS, PLEASE GO THROUGHUNIT 8 STUDY MATERIALSESPECIALLY DISCUSSION PROBLEMS WITH ANSWERS - RETURN ON EQUITY (ROE) ANALYSIS

5.Concluding remarks:

Based on the above analysis advise the owner of the company and give your concluding remarks.

Wish you all the best in resolving your Case Analysis 2.

Please take care and be safe.

Prof