Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Q.3: Baber Company had sales in 2014 of Rs. 1,560,000 on 60,000 units. Variable costs totaled Rs. 720,000 and fixed costs totaled Rs 500,000 A
Q.3: Baber Company had sales in 2014 of Rs. 1,560,000 on 60,000 units. Variable costs totaled Rs. 720,000 and fixed costs totaled Rs 500,000 A new raw material is available that will decrease the variable costs per unit by 25% (Or Rs. 3.00) However, to process the new raw material, fixed operating costs will increase by Rs. 150,000. Management feels that one-half of the declines in the variable costs per units should be passed on to customers in the form of a sales price reduction. The marketing department expects that this sales price reduction will result in a 5% increase in the number of units sold. Required: Prepare a projected CVP income statement for 2014 (a) assuming the change have not been made, and (b) assuming that changes are made as described Q. 36):Fill in the blanks for each of the following independent cases Cases Selling price Variable cost Total units Total Contribution Total Fixed Net per unit (Rs.) per unit (Rs.) sold Margin (Rs.) Cost (Rs.) Income (Rs.) 120,000 720,000 650,000 10 100,000 320,000 20 15 100,000 15,000 30 20 60,000 12,000 5 80,000 160,000 110,000 25 6 1 2 3 4 9
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started