Act 202 Final Assignment (Part-1) Faculty (RKB)

2019 2020
Particulars 6 Months 6 Months 6 Months 6 Months
(1st Half) (2nd Half) (1st Half) (2nd Half)
Selling price 16 16 18 18
per unit (A)
Units sold (B) 9000 12600 2700 5400

Sales (A)*(B) 16*9000=144000 16*12600=20160 18*2700=48600 18*5400=97200

0
Material cost 64800 90720 24300 48600

Other operating 21600 30240 7290 14580

expense
Gross profit 57600 80640 17010 34020

Indirect Costs:

Police 3000 3000 1200 1650

commission
Rent 6000 6000 6000 6000

Utility 1200 1200 1200 1200

Total indirect 10200 10200 8400 8850

costs

Net Profit: Gross profit – Total indirect costs,

Gross profit 57600 80640 17010 34020

Total indirect (10200) (10200) (8400) (8850)

costs
Net Profit 47400 70440 8610 25170
Assumptions:

 Due to COVID-19 definitely there will be a huge down sales, because people are staying
at home and they don’t need a tea from outside. However, it is expected that sales will
increase in the fourth quarter compared to the previous quarter.

 The materials cost maybe slightly higher due to demand and other harvesting problems.
So, in 2019 the cost of materials is assumed to be 45% of the sales and due to limited
supply it will reach 50% of sales in 2020. So, if the material price gets high, the seller
cannot increase the price because of the tea is not an essential thing during the period.

 Other operating expense will also be reduce in 2020 as these are directly linked to sales
these are assumed to be 15% of sales.

 The police commission may be he can talk with them and convince the current situation
and it is assumed police will understand the situation and allow a lesser payment.

 Rent and utility will remain same as there is no compensation provided and they will not
allow any deduction because of they also need to be survived.