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Phonetex Plc manufactures and sells Ipads. The given details were extracted from its approved Budget for the Year ending 31st December 2013:

1691_budget details.jpg

There was no opening Inventory and it is expected which all units to be manufactured would be sold by the end of the year under review.

Required:

1) By using the above information, compute the given:

a) The Contribution to Sales Ratio.
b) The Break Even Point both in Units and Value.
c) The Margin of Safety as a Percentage.
d) The expected Net Profit or Loss for the Year.

2) If the Company targets a Post Tax Profit of Rs.4,000,000, the Fixed Costs would raise by 10% while the Variable costs would remain unaffected. Compute the number of units to be manufactured and sold to reach the expected target profit. Suppose Tax rate to be 20% and Production Capacity exists. (Give your answer to the closest unit).

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M96947

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