PROJECT 2

The management of Dandenong Mugs would like to see the effect on profit for different levels of sales.Use the following Income Statement provided by Dandenong Mugs to :

Prepare 'flexible statement of financial performance' for sales levels of 190,000

and 210,000 mugs.

. $ $ .

Sales(200,000 mugs) 400 000

less Variable expenses

Direct materials 175 000

Direct labour 60 000

Variable factory overhead 40 000

Selling expenses 25 000

Administration expenses 10 000 310 000 .

Contribution margin 90 000

less Fixed expenses

Factory overhead 42 500

Selling expenses 6 250

Administration expenses 18 750 67500 .

Net profit 22 500

??