This is a project i worked with 3 other students. This project deals with the analysis of costs of manufacturing, pricing, budgeting. The product that we have chosen was Wooden Hanger.
Studied about the Amul Ice Cream Company situated in India and analyzed its cost sheet on the basis of various aspects to answer some of the most important questions pertaining to its manufacturing costs and cost sheet.
Presentation on flipkart distribution channel, prepared by BAHARUL ISLAMBAHARULISLAM20
ย
.Distribution channel of flipkart. How flipkart does their product or services distribution from their warehouse to the consumer. followed procedure are given in this ppt.
the document is on Cost volume profit analysis.
(Cost-volume-profit (CVP) analysis is used to determine how changes in costs and volume affect a company's operating income and net income.)
Studied about the Amul Ice Cream Company situated in India and analyzed its cost sheet on the basis of various aspects to answer some of the most important questions pertaining to its manufacturing costs and cost sheet.
Presentation on flipkart distribution channel, prepared by BAHARUL ISLAMBAHARULISLAM20
ย
.Distribution channel of flipkart. How flipkart does their product or services distribution from their warehouse to the consumer. followed procedure are given in this ppt.
the document is on Cost volume profit analysis.
(Cost-volume-profit (CVP) analysis is used to determine how changes in costs and volume affect a company's operating income and net income.)
Management Accounting Assignment Sample - Global Assignment HelpAmelia Jones
ย
This is the sample assignment on Management Accounting for College students for their academic projects. You can also avail our assignment help & services at best price in minimum time.
"๐ฉ๐ฌ๐ฎ๐ผ๐ต ๐พ๐ฐ๐ป๐ฏ ๐ป๐ฑ ๐ฐ๐บ ๐ฏ๐จ๐ณ๐ญ ๐ซ๐ถ๐ต๐ฌ"
๐๐ ๐๐จ๐ฆ๐ฌ (๐๐ ๐๐จ๐ฆ๐ฆ๐ฎ๐ง๐ข๐๐๐ญ๐ข๐จ๐ง๐ฌ) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
๐๐ ๐๐จ๐ฆ๐ฌ provides unlimited package services including such as Event organizing, Event planning, Event production, Manpower, PR marketing, Design 2D/3D, VIP protocols, Interpreter agency, etc.
Sports events - Golf competitions/billiards competitions/company sports events: dynamic and challenging
โญ ๐ ๐๐๐ญ๐ฎ๐ซ๐๐ ๐ฉ๐ซ๐จ๐ฃ๐๐๐ญ๐ฌ:
โข 2024 BAEKHYUN [Lonsdaleite] IN HO CHI MINH
โข SUPER JUNIOR-L.S.S. THE SHOW : Th3ee Guys in HO CHI MINH
โขFreenBecky 1st Fan Meeting in Vietnam
โขCHILDREN ART EXHIBITION 2024: BEYOND BARRIERS
โข WOW K-Music Festival 2023
โข Winner [CROSS] Tour in HCM
โข Super Show 9 in HCM with Super Junior
โข HCMC - Gyeongsangbuk-do Culture and Tourism Festival
โข Korean Vietnam Partnership - Fair with LG
โข Korean President visits Samsung Electronics R&D Center
โข Vietnam Food Expo with Lotte Wellfood
"๐๐ฏ๐๐ซ๐ฒ ๐๐ฏ๐๐ง๐ญ ๐ข๐ฌ ๐ ๐ฌ๐ญ๐จ๐ซ๐ฒ, ๐ ๐ฌ๐ฉ๐๐๐ข๐๐ฅ ๐ฃ๐จ๐ฎ๐ซ๐ง๐๐ฒ. ๐๐ ๐๐ฅ๐ฐ๐๐ฒ๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐ ๐ญ๐ก๐๐ญ ๐ฌ๐ก๐จ๐ซ๐ญ๐ฅ๐ฒ ๐ฒ๐จ๐ฎ ๐ฐ๐ข๐ฅ๐ฅ ๐๐ ๐ ๐ฉ๐๐ซ๐ญ ๐จ๐ ๐จ๐ฎ๐ซ ๐ฌ๐ญ๐จ๐ซ๐ข๐๐ฌ."
India Orthopedic Devices Market: Unlocking Growth Secrets, Trends and Develop...Kumar Satyam
ย
According to TechSci Research report, โIndia Orthopedic Devices Market -Industry Size, Share, Trends, Competition Forecast & Opportunities, 2030โ, the India Orthopedic Devices Market stood at USD 1,280.54 Million in 2024 and is anticipated to grow with a CAGR of 7.84% in the forecast period, 2026-2030F. The India Orthopedic Devices Market is being driven by several factors. The most prominent ones include an increase in the elderly population, who are more prone to orthopedic conditions such as osteoporosis and arthritis. Moreover, the rise in sports injuries and road accidents are also contributing to the demand for orthopedic devices. Advances in technology and the introduction of innovative implants and prosthetics have further propelled the market growth. Additionally, government initiatives aimed at improving healthcare infrastructure and the increasing prevalence of lifestyle diseases have led to an upward trend in orthopedic surgeries, thereby fueling the market demand for these devices.
What are the main advantages of using HR recruiter services.pdfHumanResourceDimensi1
ย
HR recruiter services offer top talents to companies according to their specific needs. They handle all recruitment tasks from job posting to onboarding and help companies concentrate on their business growth. With their expertise and years of experience, they streamline the hiring process and save time and resources for the company.
Affordable Stationery Printing Services in Jaipur | Navpack n PrintNavpack & Print
ย
Looking for professional printing services in Jaipur? Navpack n Print offers high-quality and affordable stationery printing for all your business needs. Stand out with custom stationery designs and fast turnaround times. Contact us today for a quote!
What is the TDS Return Filing Due Date for FY 2024-25.pdfseoforlegalpillers
ย
It is crucial for the taxpayers to understand about the TDS Return Filing Due Date, so that they can fulfill your TDS obligations efficiently. Taxpayers can avoid penalties by sticking to the deadlines and by accurate filing of TDS. Timely filing of TDS will make sure about the availability of tax credits. You can also seek the professional guidance of experts like Legal Pillers for timely filing of the TDS Return.
As a business owner in Delaware, staying on top of your tax obligations is paramount, especially with the annual deadline for Delaware Franchise Tax looming on March 1. One such obligation is the annual Delaware Franchise Tax, which serves as a crucial requirement for maintaining your companyโs legal standing within the state. While the prospect of handling tax matters may seem daunting, rest assured that the process can be straightforward with the right guidance. In this comprehensive guide, weโll walk you through the steps of filing your Delaware Franchise Tax and provide insights to help you navigate the process effectively.
Attending a job Interview for B1 and B2 Englsih learnersErika906060
ย
It is a sample of an interview for a business english class for pre-intermediate and intermediate english students with emphasis on the speking ability.
Remote sensing and monitoring are changing the mining industry for the better. These are providing innovative solutions to long-standing challenges. Those related to exploration, extraction, and overall environmental management by mining technology companies Odisha. These technologies make use of satellite imaging, aerial photography and sensors to collect data that might be inaccessible or from hazardous locations. With the use of this technology, mining operations are becoming increasingly efficient. Let us gain more insight into the key aspects associated with remote sensing and monitoring when it comes to mining.
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
The Parable of the Pipeline a book every new businessman or business student ...
ย
Cost accounting: a project on cost analysis & budgeting
1. A Group Project on โWooden Hangerโ Production Cost Analysis &
Budgeting.
Managerial Accounting: ACT333
Section: 05
Submitted To:
Sheikh Mohammad Rabby (RBY)
Lecturer,
SBE, North South University.
Date of Submission: 23/03/2016
Submitted By:
Name ID
Bidhan Chandra Halder 1410898030
Rifat Hossain Khan 1411038030
Md.Shabit Bin Jalal 1411072630
Md. Tanvir Islam 1410897630
2. 1
Letter of Transmittal
23rd
, March, 2016
Sheikh Mohammad Rabby (RBY)
Lecturer,
SBE, North South University
Subject: Submission of Group Project on โWooden Hangerโ production cost analysis &
budgeting.
Dear Sir,
Here, we are presenting to you the project report on โWooden Hangerโ that we manufacture. We
have found out its cost, operating income, breakeven point, selling price and other required
information by analyzing all the factors. It has been done according to your project guidelines.
We pray and hope that you will accept and like our project.
Thank you.
Yours sincerely,
Name ID
Bidhan Chandra Halder 1410898030
Rifat Hossain Khan 1411038030
Md.Shabit Bin Jalal 1411072630
Md. Tanvir Islam 1410897630
3. 2
Abstract
This project deals with the analysis of costs of manufacturing, pricing, budgeting. The product that
we have chosen is Wooden Hanger. This product actually belongs to home decor industry. Initially,
this is a too much necessary product. A unique design that more or less catch the eyes of the
customerโs and will derive the intention to buy this for their purposes. In this project, we have
discus estimation of all related costs like Direct & indirect materials costs, Direct & indirect labor
costs, etc. Then we have categorized all the cost under direct or indirect & Fixed or variable cost
categories. Using the simple costing system, we have determined the unit product cost of our
product, we have also determined the prime cost, conversion cost & full cost. In addition, we have
determined per unit product cost using Activity Based Costing system. Product-line profitability
report is also done using simple costing & Activity Based Costing. The pricing strategy of our
product is also discussed here. All types of budgets that are required are prepared in this report as
well. Moreover, a budgeted income statement is discussed using both traditional and contribution
margin format. We have also determined the break-even point, break-even revenue & margin of
safety.
4. 3
Table of Contents
Topic Page No.
Introduction 4
Manufacturing process 4
Production capacity 5
Cost analysis 6
Prime cost, conversion cost and full cost 11
Simple costing 11
ABC costing 13
Pricing strategy 15
Budgets 16
Break-even and Margin of Safety 21
Sensitivity analysis 22
5. 4
Introduction
We started our journey from our own experience and inspired from New-Market; where sellers
sell many lifestyle products and they grabs many customers. Therefore, we came up with this idea
of making wooden hanger to satisfy the customers. We want to do something out of the box and
therefore we finalized this. Our company name is Wood Kingdom.
This is basically a product of wood industry and it is more attractive for the customers. The product
is very necessary and customers are much responsive towards buying these sorts of products. We
basically want to make a product which is affordable and people will love to gain interest when
they get any product with a low price. Hopefully, we would stand out because of our low prices.
Our target market is to sell in Dhaka and Rajshahi. So in these cities we have many competitors.
The competitors are Aarong, New-Market shops and the other shops in the local market. As they
are in the business for a long time so we have to use a very different but effective strategy to stand
against these competitors and established our company and product in the market. They sell this
product at more than 300tk.
The Manufacturing Process
Collect bundle of
wood and screw
from shop
Cut these
wood into
different size
Process by
saw and
sand paper
Drill those
wood
Adjust
different
wood with
screw
6. 5
Estimations
Determination of the maximum production possible in a month (Production
Capacity)
We have decided to work 24 days per month. We will be working for 9 hours. Each hour 1 stages
(Assembling) of production, will be divided among the 4 workers. In this stage requires 4 hours
of labor, therefore each individual worker shall be devoting 1 direct labor hours behind each unit.
As each unit requires 1 hours to be produced. So, the number of units produced each day stands
up to be 9 units. Hence our maximum production capacity will ultimately be 216 units (24days*9
units). So,
Total Labor = 4 employees.
Total wage hour on a day = 9 hr.
Total working day on a month = 24 days.
Total Labor hours needed for a product = 4 hr.
Total working hours in a day = 4 employee ร 9 hrs
= 36 hr.
Total working hours in a month = 36 ร 24
= 864 hr.
Total Monthly Production = 864 hr รท 4 hr
= 216 units.
7. 6
Cost analysis
Direct Materials
Direct Materials Unit Cost Quantity (Q) Cost Source
Wood (Bundle) 100 tk. 1 100 tk. Badda Timber
Screw 10 tk. 1 10 tk. Hardware Shop
Total 110 tk.
Direct Labor
Direct Labor Wage Rate Labor Hour Per Unit Total Wage Rate
Labor 10 tk. 4 hrs 40 tk.
Manufacturing Overhead
Manufacturing Overhead Total Cost Source
Depreciation of Table (4000 รท 60) 67 tk. Straight Line Method
Depreciation of Chair (2500 รท 60) 42 tk. Straight Line Method
Sand Paper 200 tk. -------
Utility 1,500 tk. -------
Rent 6,000 tk. -------
Transportation Cost 500 tk. -------
Total Cost 8,308 tk. -------
Fixed Assets
Fixed Assets Unit cost Quantity Total cost Source Depreciation
Chair 500 tk. 5 2,500 tk. RFL 4,000/60 = 67 tk.
Table 2,000 tk. 2 4,000 tk. OTOBI 2500/60 = 42 tk.
Total 6,500 tk.
8. 7
Manufacturing overhead rate = (Manufacturing overhead total cost / Total number of units)
= 8,308 tk. / 216 unit = 38.46 tk. per unit
Support and selling cost
Cost names Cost in total units Source
Marketing cost:
Telephone cost 300 Airtel
Leaflet Cost 300 S.R Products
Packaging Cost:
Carton 120 S.R Products
Total cost 720
Cost Classifications
The costs are classified below according to their nature:
Cost Items Assignment of Cost Cost Behavior
Direct Material Direct Variable
Direct Labor Direct Variable
Depreciation of Table Indirect Fixed
Depreciation of Chair Indirect Fixed
Rent Indirect Fixed
Utility Indirect Fixed
Transport Indirect Fixed
Marketing cost Indirect Fixed
Packaging cost Indirect Fixed
9. 8
Allocation of Support Cost
We have one operating department (Production department) and three support department
(telephone cost, leaflet cost and packaging cost). For this reason we are using the direct method to
allocate these three costs to the Production department.
Costs Support department Operating department
Telephone
cost Leaflet cost
Packaging
cost Production department
Cost to be allocated 300 300 120
Allocation of telephone
cost (300) 300
Allocation of leaflet
cost (300) 300
Allocation of
packaging cost (120) 120
Total cost allocated
0
0 0 720
Step down method
Costs Support department Operating department
Telephone
cost
Leaflet
cost
Packaging
cost Production department
Cost to be allocated 300 300 120
Allocation of telephone
cost (1/3) (300) 100 100 100
Allocation of leaflet cost
(1/2) (400) 200 200
Allocation of packaging
cost 100% (420) 420
Total cost allocated 0 0 0 720
10. 9
Reciprocal method
Costs Support department Operating department
Telephone
cost
Leaflet
cost
Packaging
cost Production department
Cost to be allocated 300 300 120
1st Allocation of
telephone cost (1/3) (300) 100 100 100
1st Allocation of leaflet
cost (1/3) 133 (400) 133 134
1st Allocation of
packaging cost (1/3) 118 118 (353) 117
2nd Allocation of
telephone cost (1/3) (251) 84 84 83
2nd Allocation of leaflet
cost (1/3) 67 (202) 68 68
2nd Allocation of
packaging cost (1/3) 51 51 (152) 50
3rd Allocation of
telephone cost (1/3) (118) 39 40 39
3rd Allocation of leaflet
cost (1/3) 30 (90) 30 30
3rd Allocation of
packaging cost (1/3) 23 23 (70) 24
4th Allocation of
telephone cost (1/3) (53) 18 18 17
4th Allocation of leaflet
cost (1/3) 14 (41) 14 13
12. 11
Prime cost, conversion cost and full cost
Prime Cost= Direct Material + Direct labor
= (110 tk. x 216 units) + (40 tk. x 216 units)
= 32,400 tk.
Conversion cost = Direct Material + Manufacturing overhead cost
= (40 tk. x 216 units) + 8,309 tk.
= 16,949 tk.
Full cost = Variable Cost + Fixed Cost
= (110tk.x 216unit) + (40tk. x 216unit) + 10,600 tk. + 8,309 tk.
= 51309 tk.
Simple Costing
Total no. of employees = 4 employees
Hours needed per unit = 1 hrs.
Direct labor hours/unit (1hrs x 4 employees) = 4hrs
Total Direct labor Hours (216 units x 4hrs) = 864 labor hours
MOH allocation (8308 total MOH cost / 864 labor hours) = 9.62 tk. per total direct labor hour
13. 12
Profitability Report
Revenues (195 units x 250 tk) 48,750
Less: Cost of goods sold
Opening inventory finished goods 0
Direct Material (110 tk ร 216 unit) 23,760
Direct Labor (40 tk total wage rate x 216 units) 8,640
Manufacturing Overhead Cost ( 9.62 tk per unit Manufacturing
overate rate x 216 unit ) 2,077
Less: Closing Inventory Finished Goods (21 unit x 160 tk) (3,360)
Total cost of goods sold (31,117)
Gross profit 17,633
Less: Selling expenses
Marketing costs ( Telephone cost + leaflet cost) (600)
Packaging cost (120)
Operating income 16,913
14. 13
Activity Based Costing
We chose appropriate cost drivers for the items under manufacturing overhead and support costs
in and the explanations are given below:
Activity Cost Driver Explanation
Depreciation of Table No. of Units
Sold
The higher the amount of direct material used, the
more often a table is needed.
Depreciation of Chair No. of Units
Sold
Utility of the chairs is proportional to the number
of units sold.
Sand Paper No. of Units
Produced
The more numbers of unit produced, the more
need of a sand paper is needed.
Rent Floor Area in
sq. ft
Depending on the area of the production facility
being used, the rent of the workplace will vary.
Utility No. of Units
Produced
Depending on the number of units produced,
consumption of electricity, water and etc. will
vary.
Transport Cost No. of Delivery The transport cost will occur only on the number
of times workers travel to go for the delivery.
Marketing Cost No. of Units
Sold
Marketing cost is determined on the basis of the
no. of Units Sold.
Packaging Cost No. of Units
Sold
The number of carton will depend on the number
of units sold.
15. 14
Manufacturing Overhead allocation
Activity
Total Budgeted
Cost Cost Driver
Units of Cost
Driver Activity Rate
Depreciation of
Table 67 No. of Unit 216 0.31
Depreciation of
Chair 42 No. of Units sold 195 0.21
Sand Paper 200 No. of Unit 216 0.93
Rent 6,000 Floor area in s.ft 400 15.00
Utility 1,500
No. of Units
produced 216 6.94
Transport cost 500 No. of delivery 10 50.00
Marketing cost 600 No. of Units sold 195 3.08
Packaging cost 120 No. of Units sold 195 0.62
Profitability report (ABC costing)
Revenues (195 units x 250 tk) 48,750.00
Less: Cost of goods sold
Opening inventory finished goods 0.00
Direct Material (110 tk ร 216 unit) 23,760.00
Direct Labor (40 tk total wage rate x 216 units) 8,640.00
Less: Manufacturing Overhead:
Sand Paper 200
Rent 6,000
Utility 1,500
Transport 500
Depreciation of Table 67
Depreciation of Chair 42
16. 15
Less : Closing inventory of finished goods (3360)
Total Cost of goods sold (37,348)
Gross Profit 11,402
Less: selling expense
Marketing cost (600)
Packaging cost (120)
Operating income 10,682
Pricing strategy
We are using cost based pricing and determine and select the strategy based on some factors:
Customers demand for the product, Competitors prices and Cost of the product. We priced
our product according to market demands and it can fluctuate based on market conditions.
Currently, the selling price of our product is 250 taka as competitors are charging more than 300
taka for this. Our competitors are Aarong, New-Market shops and the other shops in the local
market. So we want to keep that price lower to be competitive in the market and for that we have
to maintain lower price from competitors to attract more customers and gain more profits by selling
large amount of hangers to customers.
17. 16
Budgets
Schedule 1: Revenue budget
Product name Units to be sold
Selling price per
unit
Total
revenue
Wooden Hanger 195 250 48,750
Schedule 2: Production Budget
Wooden Hanger
Budgeted units to be produce 216
Add: Target ending inventory of finished goods(10% sales) 22
Total required units 238
Less: Beginning finished goods inventory 0
Units of finished goods to be produced 238
Schedule 3A: Direct materials usage budget
Materials
Wood Screw Total
Physical units budget:
Direct material requirement
Wood (216 units x 1 bundle) 216
Screw (216 unit x 1 bundle) 216
Total quantity of direct material to be
produced 216 216
18. 17
Cost Budget:
BDT BDT
Available from beginning direct material
inventory
Wood 0
Screw 0
To be purchased and used this period:
Wood 21,600
Screw 2,160
Direct materials to be used to this period 21,600 2,160 23,760
Schedule 3B: Direct materials purchase budget
Physical units budget: Wood Screw
To be used in production from schedule 3A 216 216
Add: Target ending inventory (15% of direct materials
to be used) 32 32
Total requirement 248 248
Less: Beginning inventory direct materials 0 0
Purchase to be made 248 248
19. 18
Cost budget: BDT BDT
Wood (248 unit x 100 tk.) 24,800
Screw (248 unit x 10 tk.) 2480
Direct materials to be purchased 24,800 2,480
Schedule 4: Direct labor budget
Product
Name
Output units to be
produced (Schedule
2)
Direct
manufacturing
labor hours per unit
Total
hours
Hourly
wage rate Total
Wooden
Hanger 238 4 950 10 9,504
Total labor cost needed to be produced 216 units = 9,504 tk x 216 unit = 2,052,864 tk.
Schedule 5: Manufacturing overhead budget
Manufacturing overhead Budget
Fixed manufacturing overhead Costs (BDT)
Depreciation of Table 67
Depreciation of Chair 42
Rent 6000
Utility 1500
Transportation cost 500
Sand paper 200
Total manufacturing overhead cost 8309
20. 19
Units of input
Cost per Unit of input
(BDT) Total cost
Direct material:
Wood 1 bundle 100 tk. 100
Screw 1 bundle 10 tk. 10
Direct labor 4 hr/ DLHS 10tk. 40
Manufacturing Overhead
(8309/216) 38
Total manufacturing cost per
unit 188
Schedule 6: Ending inventory budget
Quantity Cost per unit Total cost
Direct Materials
Wood 32 100 3,240
Screw 32 10 324
Finished goods 22 188 4,071
Total ending inventory 7,635
Schedule 7 : Cost of goods sold budget
Beginning Finished inventory 0
Add: Cost of goods manufactured
Direct materials used 3A 23,760
Direct manufacturing labor 4 9,504
Manufacturing overhead 5 8309
Cost of goods available for sale 41,573
Less: Ending finished goods inventory 4,071
Cost of goods sold 37,502
21. 20
Preparing a budgeted income statement in both traditional and contribution format:
Schedule 8: Budgeted Income statement (Traditional Format)
Per unit (BDT) Total (BDT)
Revenue 250 48,750
(-) Cost of goods sold (188) (37,502)
Gross profit 62 11,248
(-) Operating Cost
Marketing cost (3) (600)
Packaging cost (0.56) (120)
Net Income 58.20 10,528
Schedule 9: Budgeted income statement (Contribution format)
Per unit (BDT) Total (BDT)
Revenue 250 48,750
Less: Variable cost
Direct material (121) (23,760)
Direct labor (48.62) (9,504)
Packaging cost (0.62) (120)
Contribution margin 78.92 15,366
Less: Fixed costs
Marketing cost (600)
Manufacturing overhead
cost (8309)
Net operating income 6,457
22. 21
Break Even and Margin of safety
Break-even point = Fixed cost/ CM per unit
= (600 + 8,309) tk. / 78.92 tk. per unit
= 112 unit
CM ratio = CM per unit/ Selling price
= 78.92 tk. per unit / 250 tk.
= 31.58%
Break even revenue = Fixed cost/ CM ratio
= 8,909 tk. / .3158
= 28,211 tk.
Margin of safety units = Budgeted sales -Break even sales
= 216 unit - 112 unit
= 104 unit
Margin of safety (%) =Margin of safety in tk. / budgeted revenue
= 28,211 tk. / 48,750 tk.
= 57.87%
23. 22
Sensitivity analysis
Key Assumptions
What if
Scenario
Units Sold Selling Price Direct
Material
Cost
Budgeted Operating
Income
Master Budget 195 250 tk. 110 tk. 6,457 tk
Scenario - 1 195 250 tk. 123 tk. 6,232 tk 12%
Increase in
the price of
direct
materials
Scenario - 2 176 250 tk. 110 tk. 1,707 tk. 10%
decrease in
demand of
the product
Scenario - 3 224 250 tk. 110 tk. 13,707 tk. 15%
Increase in
demand of
the product