Paty Ltd operating business of containers and it is contemplating two cost structures for its operations. It has high variable cost pu containers with lower annual fixed costs It has lower variable cost with higher fixed cost. Plan A: Per container revenue=100 Variable cost per container delivered=85 Cost=1,200,000 Plan B: Per container revenue=100 Variable cost per container delivered=60 Cost=4,500,000 Required: 1.BEP (In volumes) for both the plans 2.Under plan A to produce an operating income of 30,000? 3.Containers to be made under plan A to produce an operating margin which is equal to 9% of sales revenue in total.
Paty Ltd operating business of containers and it is contemplating two cost structures for its operations. It has high variable cost pu containers with lower annual fixed costs It has lower variable cost with higher fixed cost. Plan A: Per container revenue=100 Variable cost per container delivered=85 Cost=1,200,000 Plan B: Per container revenue=100 Variable cost per container delivered=60 Cost=4,500,000 Required: 1.BEP (In volumes) for both the plans 2.Under plan A to produce an operating income of 30,000? 3.Containers to be made under plan A to produce an operating margin which is equal to 9% of sales revenue in total.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Paty Ltd operating business of containers and it is contemplating two cost structures for its operations.
- It has high variable cost pu containers with lower annual fixed costs
- It has lower variable cost with higher fixed cost.
Plan A:
Per container revenue=100
Variable cost per container delivered=85
Cost=1,200,000
Plan B:
Per container revenue=100
Variable cost per container delivered=60
Cost=4,500,000
Required:
1.BEP (In volumes) for both the plans
2.Under plan A to produce an operating income of 30,000?
3.Containers to be made under plan A to produce an operating margin which is equal to 9% of sales revenue in total.
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