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