Compute the number of units to be manufactured and sold to, Ask an Expert

Accounting

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).

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M96947

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