Management Accounting By Paresh Shah Oxford University Press Chapter No.

Chapter Name 17 Decision Involving Alternative Choices

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Product B Rs. Sales Variable Cost Contribution Fixed cost

Profit

Product C Rs. Total Rs. 0 0 0 0 0

The present cost structure can be stated as below Per Unit Rs. Total Rs. Sales Variable Cost Contribution 0 0 Fixed Cost Net Profit 0

Present Rs. Sales Variable Cost Contribution

10% Price Reduction 15% Price Reduction Rs. Rs.

Product Wise Probitability Structure Product X Product Y Rs. Rs. Selling Price per Unit Variable Cost per Unit Direct Labour Direct Wages Variable Overheads Contribution per Unit

0 0

0 0

Evaluation of Various Alternative Sales Mixes as per Total Contribution Units Product X Product Y Total Alternative X Y Rs. Rs. Rs. A 0 0 B 0 0 C 0 0 D 0 0

0 0 0 0

Income Statement For May and June, 2005 Domestic Sales Production Sales (units) Selling Price p.u. (Rs.) Sales 0 Costs: Direct Material Direct Labour Factory Overhead Selling & Adm. Overhead Special Packing Total Costs 0 Profit 0

Export Sales

Total Sales

0 0 0 0 0 0 0 0

0 0

Sales (Units) Sales Selling Costs: Advertising Sales Salaries Travelling Expenses Rent Others Total Cost of goods sold Less: Variable Production Profit Cost of

Present

Budgeted Incremental

0 0

0 0

0 0

capacity Comparative Profitability Statement Process A Process B Rs. Rs. (i) Selling price per Unit Variable price per unit Contribution price per unit 0 0 Total Annual Contribution 0 0 Total Fixed Costs per year Total Income 0 0 Total Contribution 1 Total Income 1.00 0.00 Process A should be Chosen

Computation of differential cost of production Capacity Level Production and Sales (Units) 0 Material and labour cost Variable overhead Semi Variable overheads Fixed overheads Total Cost

100% 0

Differential Cost Analysis Capacity Levels Production(Units) Material and Labour Variable Overhead expenses Semi-variable expenses Fixed Expenses 0

Differential Cost 0 0 0 0 0 0 0

Product A Product B Selling Price Per Unit Rs. Variable Cost Per Unit Rs. Direct Material Direct Labour Variable Overheads Contribution Per Unit Number of Labour Hours Contribution Per Labour Hour 0 0 1 0 0 0 1 0

Product A Product B Product C Selling Price per units Rs. Variable cost Material Labour

1 1 -1 -1.00

1 1 -1 -1.00

1 1 -1 -1.00

Contribution per unit Rs. Contribution per Kg of Raw material Rs. Contribution per labour hrs Rs.