1

DcQ73lec1pt2

DcQ62lec1pt3

DcQ64lec2pt2
2

DcQ68lec2pt3

DcQ66lec2pt4

DcQ63lec2pt4
3

DcQ67lec2pt5

DcQ70lec3pt2
4

DcQ72lec3pt2

DcQ71lec3pt4
5

DcQ117lec3pt4

DcQ109lec4pt1
6

DcQ110lec4pt2

DcQ115lec4pt2

DcQ112lec4pt3

DcQ122lec4pt3

Moosa Butt Enterprises are leading exporters of Kid’s Toys. J Ltd. of USA have approached Moosa Butt
Enterprises for exporting a special toy named “Dancing Duck”. The order will be valid for next three years
at 3000 toys per month. The export price of the toy will be $4.
Cost data per toy is in Rs. as follows:
Material 60
Labour 25
Variable Overheads 20
Primary packing per toy 15
The toys will be packed in lots of 50 each. For this purpose a special box, which contain the 50 toys will have
to be purchased, cost being Rs.400 per box.
Moosa Butt Enterprises will also have to import a special machine for making the toys. The cost of the
machine is Rs. 2400000 and duty thereon will be at 12%. The machine will have an effective life of 3 years
7

and depreciation is to be charged on straight line method. Apart from depreciation, annual fixed overheads
are estimated at Rs. 400000 for the first year with 6% increase in the second year. Fixed overheads are
incurred uniformly over the year.
Assuming the average conversion rate to be Rs.50 per $, you are required to:
(i) Prepare monthly and yearly profitability statements for the first year and second year assuming the
production at 3000 toys per month.
(ii) Compute monthly and yearly break-even units in respect of the first year.
(iii) In what contingency can there be a second break-even point for the month and for the year as a whole?
(iv) Have you any comments to offer on the above?

DcQ75lec4pt4

DcQ78lec5pt3
8
9

DcQ105lec5pt4

DcQ106lec5pt5
10

DcQ65lec6pt1
11

DcQ60lec6pt3

DcQ61lec6pt4
12

DcQ125lec7pt1

DcQ124lec7pt1

DcQ123lec7pt1

DcQ120lec7pt1
13

DcQ119lec7pt2

DcQ118lec7pt2

DcQ114lec7pt2

DcQ113lec7pt2

DcQ107lec7pt2
14

gcapratcemanualQ1

gcapratcemanualQ2
15

gcapratcemanualQ5

gcapratcemanualQ5
16

Farnokia Sports Company has decided to manufacture treadmills. It will begin with a single
model, and if that sells well, it will expand to produce a full line of treadmills. It is making the
decision about which of two prototypes to produce initially. The following projections have been
made by the Marketing, Engineering, and Production Departments:

Fixed costs will total $375,000 if Treadmill A is produced and $300,000 if Treadmill B is
produced. Farnokia Sports’ income tax rate is 30%.
First Question: What single sales revenue amount that is the same for each of the two treadmills
will also result in the same profit or loss for each of the two treadmills?

Second Question: If we had been asked simply to find a single quantity of units that would be
the same for both treadmill models
17

DcQ34lec8pt1

DcQ34lec8pt3
18

the plant.The fixed cost is expected to be reduced to Rs. 130,000.Additional cost of plant shut down are
expected to be Rs. 15000.

DcQ31lec8pt4
19

DcQ33lec8pt1
20

DcQ32lec8pt1

DcQ35lec8pt1