TOPIC

COST VOLUME PROFIT ANALYSIS

ASSIGNMENT

DIRECTION &

REQUIREMENT/S

(Identify the ILOs to be assessed at the end of each requirement. Include the rubric or marking scheme for each item/requirement.)

This is an individual activity given to the students to do independently and submit their answer. Answer the question based on the understanding of the topics discussed and problems solved in the class lectures.

Question/Problem Solving:

1. Ahmed WLL produces and sells tables. The company sells total of 5000 tables in a year. The selling price of one table is 60 BD. The company has both variable and fixed expenses. The fixed expenses of manufacturing is 20,000 BD and fixed expense of selling is 10,000 BD.

Particulars	Total (In BD)
Sales
Direct Materials	124,700
Direct Labor	97,600
Manufacturing Overhead:
Variable	14,500
Fixed
Selling & Administrative:
Variable	38,900
Fixed

Required:

1. Calculate the break even in sales (BD) and Breakeven in Units. Calculate the margin of safety. (5 marks) (Marking scheme: Computation = 3, correctness of figures = 2).
2. Assume that the sales volume increases by 10 percent with no change in total fixed expenses, determine the operating income? (2 marks). (Marking scheme: Computation = 1, correctness of figures = 1)
3. If you want the profit percent to increase by 15 percent how much will be the breakeven sales. (5 marks). (Marking scheme: Computation = 3, correctness of figures = 2)
4. Now assume that your variable cost per unit has decreased by BD 20 and your overall fixed expense increased by 10,000, calculate the new breakeven level in units and break even in sales.