Question
Question: 1 The HASF Ink Ltd income statement for the preceding year is presented below except as noted the cost / revenue relationship for the
Question: 1
The HASF Ink Ltd income statement for the preceding year is presented below except as noted the cost / revenue relationship for the coming year is expected to follow the same pattern as in the preceding year income statement for the year ending March 31 is as follow s Sales (200,000 units @ 2.5 Each) Rs. 5, 00,000 Variable cost 3, 00,000 Contribution margin 2, 00,000 Less Fixed cost 100,000 Profit before tax 100,000 Less tax 35,000 Profit after tax 65,000
Required Suppose that a plant expansion will add Rs. 50,000 and increase capacity by 60% how many units would have to be sold after the addition to break even units in quantity.
Question: 2
Q#1HASF & Company produces cleaning kits for shotguns. The production capacity available will enable the firm to produce 50,000 kits annually. A projected income statement for next year shows
Sales460,000
Costs of goods sold296,000
Gross profit164,000
Selling and administrative expenses125,000
Net income39,000
Fixed manufacturing overhead costs 40% of the cost of goods sold. Regular selling price per unit is 10 A 10% sales commission is paid to sales representatives for each kit sold. The purchasing department of a large discount chain has offered to purchase 1500 kits at $6 each. Company sales manager's initial response is to refuse the offer because he concludes that the $6 price is below the firm's average cost The sales commission would not be paid on the special order.
What will be the impact on net income??
Question:3
The HASF Ink Ltd income statement for the preceding year is presented below except as noted the cost / revenue relationship for the coming year is expected to follow the same pattern as in the preceding year income statement for the year ending March 31 is as follow s Sales (200,000 units @ 2.5 Each) Rs. 5, 00,000 Variable cost 3, 00,000 Contribution margin 2, 00,000 Less Fixed cost 100,000 Profit before tax 100,000 Less tax 35,000 Profit after tax 65,000.
Required
What is the break- even point in units?
Question 4
HASF & Company produces cleaning kits for shotguns. The production capacity available will enable the firm to produce 50,000 kits annually. A projected income statement for next year shows
Sales460,000
Costs of goods sold296,000
Gross profit164,000
Selling and administrative expenses125,000
Net income39,000
Fixed manufacturing overhead costs 40% ofthe cost of goods sold. Regular selling price per unit is 10 A 10% sales commission is paid to sales representatives for each kit sold. The purchasing department of a large discount chain has offered to purchase 1500 kits at $6 each. Company sales manager's initial response is to refuse the offer because he concludes that the $6 price is below the firm's average costThe sales commission would not be paid on the special order.
What is the lowest price per unit the firm could accept if it wants to earn annual net income of 48,000 ( ignore sales commission )
Question: 5
The HASF Ink Ltd income statement for the preceding year is presented below except as noted the cost / revenue relationship for the coming year is expected to follow the same pattern as in the preceding year income statement for the year ending March 31 is as follow s
Sales (200,000 units @ 2.5 Each)Rs. 5, 00,000
Variable cost3, 00,000
Contribution margin2, 00,000
Less Fixed cost100,000
Profit before tax100,000
Less tax35,000
Profit after tax65,000
Required
The company management feels that it should earn at least Rs.10, 000 pre taxes per annum on the new investment what sales volume is required to enable the company to maintain existing profit.
Question 6
The HASF Ink Ltd income statement for the preceding year is presented below except as noted the cost / revenue relationship for the coming year is expected to follow the same pattern as in the preceding year income statement for the year ending March 31 is as follow s
Sales (200,000 units @ 2.5 Each)Rs. 5, 00,000
Variable cost3, 00,000
Contribution margin2, 00,000
Less Fixed cost100,000
Profit before tax100,000
Less tax35,000
Profit after tax65,000
Required
Suppose the plant operated at full capciaty after the expansion what profit will be earned.
Question:7
The HASF Ink Ltd income statement for the preceding year is presented below except as noted the cost / revenue relationship for the coming year is expected to follow the same pattern as in the preceding year income statement for the year ending March 31 is as follow s
Sales (200,000 units @ 2.5 Each)Rs. 5, 00,000
Variable cost3, 00,000
Contribution margin2, 00,000
Less Fixed cost100,000
Profit before tax100,000
Less tax35,000
Profit after tax65,000
Required
At what level of sales will the company be able to maintain its present pre- tax profit position even after expansion?
Question 8
The HASF Ink Ltd income statement for the preceding year is presented below except as noted the cost/revenue relationship for the coming year is expected to follow the same pattern as in the preceding year Income statement for the year ending March 31 is as follows
Sales (200.000 units 25 Each) Rs. 5 00000
Variable cost Contribution margin300000
CM200000
Less Fixed cost100000
Profit before tax100000
Less tax35000
Profit after tax65000
Required
What is the break even point in amount
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