ABC CASE STUDY

PRESENTED BY :
GIVEN –
BRAND A
VARIABLE COST = 25% SELLING PRICE
PROFIT= 5% SELLING PRICE

BRAND B –
V. C. =50% S.P
PROFIT= 5% S.P

BRAND C –
V.C =75% S.P.
PROFIT=5%S.P.

NOTE-
ASSUMING NO.OF UNITS SOLD 100

SELLING PRICE= Rs. 1000

CASE 1:-
INCREASING THE PRICE OF EACH BRAND BY 10%
 VOLUME OF SALES REMAIN SAME

BRAND A –
NEW S. P. = Rs.1100
REVENUE = 100*1100= 1,10,000
C.P=Rs.950
TOTAL COST=950*100=95000
PROFIT=110000-950000=Rs.15000
PROFITABILITY=(150000/950000)*100=15.78%

BRAND B-
NEW S. P. = Rs.1100
REVENUE = 100*1100= 1,10,000
C.P=Rs.950
TOTAL COST=950*100=95000
PROFIT=110000-950000=Rs.15000
PROFITABILITY=(150000/950000)*100=15.78%
BRAND C-
NEW S. P. = Rs.1100
REVENUE = 100*1100= 1,10,000
C.P=Rs.950
TOTAL COST=950*100=95000
PROFIT=110000-950000=Rs.15000
PROFITABILITY=(150000/950000)*100=15.78%
VOLUME WILL DROP BY 10%

BRAND A –
REVENUE = 90*1100=99000
V. C. = 90*2.5= 225
F.C.=700
TOTAL COST = 925
PROFIT = 175 P.UNIT
PROFITABILITY= 18.91%

BRAND B –
REVENUE= 90*1100=99000
V.C.=90*5=450
F.C. 450
TOTAL COST=900
PROFIT= 200
PROFITABILITY=200/900=22.22%
BRAND C-

REVENUE=90*1100=99000
V.C.=90*7.5=675
F.C.=200
TOTAL COST =875
PROFIT=225
PROFITABILITY=25.71%
•VOLUME WILL DECREASE BY 30%
BRAND A-
REVENUE=70*1100=77000
V.C. =70*2.5=175
F.C.=700
TOTAL COST= 875
PROFIT=225
PROFITABILITY= 25.71%

BRAND B-
REVENUE=70*1100=77000
V.C.= 70*5=350
F.C.=450
T.C.=800
PROFIT= 300
PROFITABILITY=37.5%
BRAND C-
REVENUE =70*1100=77000
V.C. =70*7.5=525
F.C. =200
T.C.=775
PROFIT=325
PROFITABILITY=41.93%
CASE 2-:
DROP THE PRICE OF EACH BRAND BY 10%
•THE VOLUME WILL REMAIN SAME

NEW SELLING PRICE= 900

BRAND A-
REV. = 100*900=90000
V.C.=100*2.5=250
F.C. =700
T.C. =950
LOSS =50
NO PROFITABILITY

BRAND B-
REV. =100*900=90000
V.C.=500
F.C=450
T.C.=950
LOSS =50
NO PROFITABILITY
BRAND C-
REV. =100*900=90000
V.C.=500
F.C=450
T.C.=950
LOSS =50
NO PROFITABILITY
•VOLUME WILL INCREASE BY 10%

BRAND A-
REV.= 110*900=99000
V.C.= 275
F.C.=700
T.C.=975
LOSS=75
NO PROFITABILITY

BRAND B-
REV. .= 110*900=99000
V.C.= 550
F.C.=450
T.C=1000
LOSS=100
NO PROFITABILITY
BRAND C-
REV. .= 110*900=99000
V.C.= 825
F.C.=200
T.C=1025
LOSS=125
NO PROFITABILITY
•VOLUME INCREASES BY 30%

BRAND A-
REVENUE=130*900=1,17,000
V.C=130*2.5=325
F.C=700
T.C.= 1025
LOSS=125
NO PROFITABILITY

BRAND B –
REVENUE=130*900=1,17,000
VC.=650
F.C.= 450
T.C=1100
LOSS=200
NO PROFITABILITY
BRAND C –
REVENUE=130*900=1,17,000
VC.=975
F.C.= 200
T.C=1075
LOSS=175
NO PROFITABILITY
Thank You