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PRODUCT A B C DSales Price 20 40 30 20Direct material (imported) 7 16 13 10Direct labour and packaging 3 4 6 4Production overhead 4 5 6 5

Budget sales (units) 1500 2000 2000 1500Budget sales revenue 30000 80000 60000 30000total contribution 6 15 5 1

Contribution over each euro of sales30.00% 37.50% 16.67% 5.00%

Priority of utilization contributionand imported raw materials

2 1 3 4

PRODUCT A B C DBudget sales (units) 1500 2000 2000 1500Budget sales revenue 30000 80000 60000 30000 total budgeProduction overhead (absorption) 4 5 6 5 total fixedTotal production overhead 6000 10000 12000 7500Fixed production overhead 3000 8000 6000 3000Production overhead (marginal) 2 1 3 3

PRODUCT A B C DSales Price 20 40 30 20Direct material (imported) 7 16 13 10

Direct labour and packaging 3 4 6 4Production overhead 2 1 3 3Budget sales (units) 1500 2000 2000 1500Budget sales revenue 30000 80000 60000 30000Total contribution 8 19 8 3

Contribution over each euro of sales 40.00% 47.50% 26.67% 15.00%

Priority of utilization contributionand imported raw materials

2 1 3 4

PRODUCT A B C D totalSales Price 20 40 30 20 110Direct material (imported) 7 16 13 10 46Direct labour and packaging 3 4 6 4 17Production overhead 2 1 3 3 9sales(units) 1000 1000 1000 1000 4000sales revenue 20000 40000 30000 20000 110000

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direct material consumed 7000 16000 13000 10000 46000

priority Bsales(units) 1000 2200 1000 1000 5200sales revenue 20000 88000 30000 20000 158000direct material consumed 7000 35200 13000 10000 65200

priority Asales(units) 1971 2200 1000 1000 6171sales revenue 39420 88000 30000 20000 177420direct material consumed 13797 35200 13000 10000 71997

MOST PROFITABLE PRODUCTIONPLAN

PRODUCT A B C D totalSales Price 20 40 30 20 110Direct material (imported) 7 16 13 10 46Direct labour and packaging 3 4 6 4 17Production overhead 2 1 3 3 9sales(units) 1971 2200 1000 1000 6171cost of sales 23652 46200 22000 17000 108852sales revenue 39420 88000 30000 20000 177420

Profit and Loss account

Sales 177420Cost of sales 108852Gross margin 68568Less: Fixed production overhead 20000

48568Administration expenses 19900Distribution expenses 5700Sales commission 17742Financial expenses 800 44142Net profit 4426

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ratiot sales revenue 200000 10roduction overhead 20000

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from exhibit 388000/sales price of B= 88000/40

Given72000-65200=971 additional units added to A

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PRODUCT A B C D totalSales Price 20 40 30 20 110Cost of sales 12 21 22 17 72Contribution 8 19 8 3 38Contribution (after commission) 6 15 5 1 27

Sales (units) 1971 2200 1000 1000 6171Sales revenue 39420 88000 30000 20000 177420

Fixed cost=expenses-commission+fixed production overheadF.C=44142-17742+20000

46400

Break even point in sales revenue= fixed cost/ C.M ratio46400/(27/110)

189037 euros

Break even point in sales unit= 46400/271719 units

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If we produce minimum 1000 unitsPRODUCT A B C D total

Sales Price 20 40 30 20 110

Direct material (imported) 7 16 13 10 46

sales(units) 1971 2200 1000 1000 6171

direct material consumed 13797 35200 13000 10000 71997

sales revenue 39420 88000 30000 20000 177420

If we are not restricted to 1000 unitsPRODUCT A B C D total

Sales Price 20 40 30 20 110Direct material (imported) 7 16 13 10 46sales(units) 2671 2500 1000 0 6171raw material consumed 18697 40000 13000 0 71697sales revenue 53420 100000 30000 0 183420

OPPORTUNITY COST= 183420-1774206000 euros

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PRODUCT A B C D

Sales Price 27 47 37 27

Direct material (imported) 7 16 13 10

Direct labour and packaging 3 4 6 4

Production overhead 2 1 3 3Cost of sales 12 21 22 17total contribution 15 26 15 10Contribution over each euro of sales 0.556 0.553 0.405 0.370Priority of utilization contribution andimported raw materials

1 2 3 4