Question

In: Accounting

The HASF Ink Ltd income statement for the preceding year is presented below except as noted the cost/revenue relationship

The HASF Ink Ltd income statement for the preceding year is presented below except as noted the cost/revenue relationship for the coming year is expected to follow the same pattern as in the prior year income statement for the year ending March 31 is as follows s 

 

Sales (200,000 units @ 2.5 Each)  Rs. 5, 00,000 

Variable cost        3, 00,000

Contribution margin         2, 00,000

Less Fixed cost         100,000

Profit before tax        100,000 

Less tax          35,000 

Profit after tax           65,000

 

Required

 

 

The company management feels that it should earn at least Rs.10, 000 pre taxes per annum on the new investment what sales volume is required to enable the company to maintain existing profit.

Solutions

Expert Solution

Contribution margin per unit = Contribution margin / No. of units  

= Rs. 200,000 / 200,000 units

= Rs. 1 per unit

No. of sales units need to sale =(Target profit + Fixed costs) / Contribution margin per unit

= (Rs. 10,000 + Rs. 100,000) / Rs. 1 per unit

= 110,000 units

Sales required to attain target profit = No. of sales units need to sale  x sales price per unit

= 110,000 units x Rs. 2.5 per unit

= Rs. 275,000

 

 

DEEPIKA GOYAL answered 2 years ago
Next > < Previous

Related Solutions

Presented below is the latest income statement of ABC Ltd.:
Presented below is the latest income statement of ABC  Ltd.:        Sales.............................................................................    $380,000        Cost of goods sold........................................................      225,000        Gross profit....................................................................    $155,000        Operating expenses......................................................        85,000        Income before income taxes.........................................         70,000        Income taxes.................................................................        28,000        Net income....................................................................    $  42,000 In addition, the following information related to net changes in working capital is available:                                                                                                          Debit                   Credit        Cash..............................................................................       $12,000        Accounts receivable (net).............................................           8,000        Inventories.....................................................................                                   $19,400        Salaries payable (operating expenses)........................           6,000        Accounts payable..........................................................                                       9,000        Income tax payable.......................................................           3,000 ABC Ltd. also reports that depreciation expense for the...
Presented below is the income statement of Cowan, Inc.:          Sales revenue                      &nbsp
Presented below is the income statement of Cowan, Inc.:          Sales revenue                                                                        $380,000          Cost of goods sold                                                                 225,000          Gross profit                                                                             $155,000          Operating expenses                                                                   95,000          Income before income taxes                                                      60,000          Income taxes                                                                              24,000          Net income                                                                             $ 36,000 In addition, the following information related to net changes in working capital is presented:                                                                                                               Debit                  Credit          Cash                                                                                         $12,000          Accounts receivable                                                                   25,000          Inventories                                                                                                              $19,400          Salaries payable (operating expenses)                                        8,000         ...
Presented below is the income statement of Cowan, Inc.:          Sales revenue                      &nbsp
Presented below is the income statement of Cowan, Inc.:          Sales revenue                                                                         $380,000          Cost of goods sold                                                                    225,000          Gross profit                                                                             $155,000          Operating expenses                                                                    95,000          Income before income taxes                                                      60,000          Income taxes                                                                              24,000          Net income                                                                             $ 36,000 In addition, the following information related to net changes in working capital is presented:                                                                                                               Debit                     Credit          Cash                                                                                          $12,000          Accounts receivable                                                                   25,000          Inventories                                                                                                              $19,400          Salaries payable (operating expenses)                                        8,000          Accounts payable                                                                                                     14,000         ...
The income statement for Sweetwater Ltd. is shown below: SWEETWATER LTD. Income Statement Year Ended December...
The income statement for Sweetwater Ltd. is shown below: SWEETWATER LTD. Income Statement Year Ended December 31 (in millions) 2018 2017 2016 Sales $ 1,603 $ 1,403 $ 1,205 Cost of goods sold 907 754 602 Gross profit 696 649 603 Operating expenses 516 407 401 Income from operations 180 242 202 Interest expense 80 50 40 Income before income tax 100 192 162 Income tax expense 25 48 41 Net income $ 75 $ 144 $ 121 Part 1...
The year end income statement for Sophie Corporation is presented below: Sophie Corporation Income Statement For...
The year end income statement for Sophie Corporation is presented below: Sophie Corporation Income Statement For the Year Ended December 31, 2019 Sales (600 units) $36,000 Cost of Goods Sold Labor $9,000 Material $10,800 Fixed Overhead $1,800 $21,600 Gross Profit $14,400 Administrative Expense Fixed $5,400 Variable $3,600 $9,000 Operating Income $5,400 Do not enter dollar signs or commas in the input boxes. Round all answers to the nearest whole number. For Unit calculations round your answers up to the nearest...
The year end income statement for Sophie Corporation is presented below: Sophie Corporation Income Statement For...
The year end income statement for Sophie Corporation is presented below: Sophie Corporation Income Statement For the Year Ended December 31, 2019 Sales (560 units) $28,000 Cost of Goods Sold Labor $7,000 Material $8,400 Fixed Overhead $1,400 $16,800 Gross Profit $11,200 Administrative Expense Fixed $4,200 Variable $2,800 $7,000 Operating Income $4,200 Do not enter dollar signs or commas in the input boxes. Round all answers to the nearest whole number. For Unit calculations round your answers up to the nearest...
Presented below isthe comparative statement of income, prepared on a cash basis, for Mingwei Ltd. for...
Presented below isthe comparative statement of income, prepared on a cash basis, for Mingwei Ltd. for the past two years. The manager is puzzled by the fact that net income was lower in2023than 2022.MINGWEI LTD.Statementof Income, Cash BasisYears EndedDecember 31——————————————————————————————————————————20232022Service revenue.........................................................................$350,000$365,000ExpensesSalaries expense.................................................................200,000190,000Office expense....................................................................54,00055,000Repairs and maintenance expense.....................................20,00015,000Interest expense..................................................................15,0002,000Total expenses...........................................................................289,000262,000Income before income tax..........................................................61,000103,000Income tax expense...................................................................24,40041,200Net income.................................................................................$ 36,600$ 61,800In talking with the manager, you gather the following information, which was not reflected in the above statements:1.The company borrowed $200,000 on June 1, 2022and...
An income statement for Iyekqv603 Corp. for the first quarter of the year is presented below:...
An income statement for Iyekqv603 Corp. for the first quarter of the year is presented below: Iyekqv603 Corp. Income Statement For Quarter Ended March 31 Sales $ 910,000 Cost of goods sold 645,000 Gross margin 265,000 Selling and administrative expenses Selling $ 103,000 Administration 110,000 213,000 Net operating income $ 52,000 On average, a book sells for $65. Variable selling expenses are $6 per book with the remaining selling expenses being fixed. The variable administrative expenses are 5% of sales...
An income statement for Sam's Bookstore for the first quarter of the year is presented below:...
An income statement for Sam's Bookstore for the first quarter of the year is presented below: Sam's Bookstore Income Statement For Quarter Ended March 31 Sales $ 910,000 Cost of goods sold 530,000 Gross margin 380,000 Selling and administrative expenses Selling $ 113,000 Administration 130,000 243,000 Net operating income $ 137,000 On average, a book sells for $70. Variable selling expenses are $5 per book with the remaining selling expenses being fixed. The variable administrative expenses are 3% of sales...
Financial information on AAA Ltd. is shown below. AAA Ltd. Income Statement For the Year Ended...
Financial information on AAA Ltd. is shown below. AAA Ltd. Income Statement For the Year Ended December 31st, 2019 2018 Sales 5,375,250 4,025,350 Cost Of Goods Sold 2,835,450 2,105,837 Other Expenses 1,100,500 1,058,600 Depreciation 75,500 67,800 Earnings Before Interest and Taxes 1,363,800 793,113 Interest Expense 84,350 68,925 Earnings Before Taxes 1,279,450 724,188 Taxes (30%) 383,835 217,256 Net Income $ 895,615 $ 506,932 AAA Ltd. Balance Sheet As at December 31st, ASSETS 2019 2018       Cash & Equivalent 67,250 53,925      ...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT