The following data are available for a manufacturing company for a yearly period.
|
Particulars |
Rs. in Lakhs |
|
FIXED EXPENSES |
|
|
Wages and Salaries |
9.5 |
|
Rent, Rates and Taxes |
6.6 |
|
Depreciation |
7.4 |
|
Sundry Administrative Expenses |
6.5 |
|
SEMI VARIABLE EXPENSES |
|
|
Maintenance and Repairs |
3.5 |
|
Indirect Labor |
7.9 |
|
Sales Department’s Salaries |
3.8 |
|
Particulars |
Rs. in Lakhs |
|
Sundry Administrative Expenses |
2.8 |
|
VARIABLE EXPENSES [ AT 50% CAPACITY] |
|
|
Materials |
21.7 |
|
Labor |
20.4 |
|
Other Expenses |
7.9 |
|
Total |
98.0 |
Assume that the fixed expenses remain constant at all levels of production. Semi variable expenses remain constant between 45% and 65% capacity, increasing by 10% between 65% and 80% capacity and by 20% between 80% and 100% capacity.
Sales at various levels are,
At 50% Rs.100 lakhs
At 60% Rs.120 lakhs
At 75% Rs.150 lakhs
At 90% Rs.180 lakhs
At 100% Rs.200 lakhs
Prepare a fl exible budget for the year at 60% and 90% capacity utilizations and calculate the profits/losses at those levels