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Situation Analysis:
The monthly budget for Sales Revenue and Manufacturing cost of the two corresponding products RC1 and RC2 were
given where they had planned to sell 10,000 units of RC1 and 5,000 units of RC2.So the ratio was 2:1 for
RC1:RC2.Also the projected selling price was set to be $20 and $23 for RC1 and Rc2 respectively. The two products
also had fixed and variable price components where parts, direct labour and supplies were considered variable and the
rest of the components were fixed.
Problem Statement:
1. Cost analysis about the Fixed & Variable cost of the 2 products namely RC1 and RC2.
2. Determine the Breakeven analysis for the case where they incur no profit no loss situation.
3. Determine the Revenue & Profit at the breakeven and at the targeted profit of $210,000 for the year 2000.
Cost analysis:
b) At targeted profit
RC1 = 9834.43
RC2 = 4917.21
Total sales = 9834.43*20 + 4917.21*23 = 309784.43
Variable Cost
RC1 = 9834.43*10.3125 = 101417.559
RC2 = 4917.21*12.175 = 59867.0317
Total Variable Cost = 161284.59
Sales 309784.43
(-)Variable Cost 161284.59
Contribution 148499.84
(-)Fixed Cost 131000
Profit 17499.84(approx.) or 17500