Question

The PROCOM Corporation is planning its financing for the next six months. PROCOM makes one item, which it sells through the retail shop in the front of the factory. The planning process was started with profit-and loss computations. Profit is revenue less expenses and revenue is quantity times the unit price. Expenses are made up fixed costs and variable costs. Fixed costs include: rent, salaries, and utilities. Variable costs depend directly on the quantity. These costs are materials and labor. The following represents planning figures for the next six months. Using D-cide, find the profit for the next six months and export the results into an excel spreadsheet.

Planning period: Six Months

Unit Price: $500

Quantity: 20,000 Up 5% Monthly

Fixed Costs:

Rent: $40,000

Salaries: $200,000

Utilities: $50,000 Down 2% Monthly

Variable Costs:

Unit Material: $200

Unit Labor: $100 Up $5 monthly

Answer 1

CALCULATION SHOWING PROFIT FOR SIX MONTH

(FIGURES in $)

MONTH	PRICE (A)	QUANTITY (UP 5%) (B)	RENT (C)	SALARIES (D)	UTILITIES (DOWN 2%) (E)	MATERIAL COST (F) = 200 * (B)	LABOR COST (G) = (B)*Labor Per unit ( Note 1)	VARIABLE COST (F+G)=H	FIXED COST (C+D+E)=I	EXPENSES (H+I)=J	REVENUE B*A=K	PROFIT K-J=L
1	500	20,000	40,000	200,000	50,000	4,000,000	2,000,000	6,000,000	290,000	6,290,000	10,000,000	3,710,000
2	500	21,000	40,000	200,000	49,000	4,200,000	2,205,000	6,405,000	289,000	6,694,000	10,500,000	3,806,000
3	500	22,050	40,000	200,000	48,020	4,410,000	2,425,500	6,835,500	288,020	7,123,520	11,025,000	3,901,480
4	500	23,153	40,000	200,000	47,050	4,630,600	2,662,595	7,293,195	287,050	7,580,245	11,576,500	3,996,255
5	500	24,311	40,000	200,000	46,109	4,862,200	2,917,320	7,779,520	286,109	8,065,629	12,155,500	4,089,871
6	500	25,527	40,000	200,000	45,187	5,105,400	3,190,875	8,296,275	285,187	8,581,462	12,763,500	4,182,038

Note : 1

Unit Labor Per Month

Month Labor per unit

( UP $5 MONTHLY)

1   100   

2 105

3   110

4 115

5   120

6 125

Note :2 Figures are rounded off to the Nearest Value.