UNIT - 2D re PRou Chen: AND COST AIBLYSES! Concepts oe cas etn: . T Rea np | Lesa St wefens bo a/£ eter epi a ce 1 uctput that can, ||: LE 5 a be'povauced pes.| | Change tp ee ee 2 . unit of as aces thet On bE padducedl| | Cobourg “f change In aw gtven penod of "oe frre nnpP> ATP oa San oP Vera Nip MP= TPn Ten vie - 1 Shovk sun eee v s O-> + all the ? u eck. factesss ate Natiable law of setums to oe Reekeony tO Aa veale. recdsding. oelaw of BEE! foo ractae: According to this Caw fF we change. yrits of vadiable Factss which 's tabous In Shark €O%r> then what 'S the change ir TR ©») Total ped uctvity + 0 law of Incteating retuss to a poctos @ Cw of Alminishing geteans to a Factec @ caw of eoritant! eet Loa Factos 0 law OF incveating wekans to a factos: A) Oe Cee SR Se oe come actosding Ld Hs (ou IF we | Incwease pits of Vaslabse packos which the 7 Laygite IN the shastworn “then the 7 wit increase at Increasing Sates * Assumptions or this Caw! ee I Labous 15 the only vocwiable Factor. Qcapital: fs a Fixed factor 2+N0 change MA Technology Wtabous is of Hamagenous Gkplanaitton at buts \CO (9 dioninishing Ebon! $a fesctoy According ta thi slew If We jNewease the units, of. varlable. pete, which ts laboug MO the. showt.w~un then the TR wht Mnewease ek"as of Constants wetuen: to FACE Lo ‘ ' Accosdieg to this, law, CL we trea e te untles CL? Saelable Faces Whit,” Ss laboue In the shart Tan, then we 4? wit INcwEeas-R ext. canstant wate, Star ; ‘ agi Law of votlable paopertiensgt P): RCeowding to this law YT we (nteease MNES of Yortable foctay which Is atous 9 Ghe ShoBtBun, then Arsh of ail the Tp - Poa NM eseqse ant Mncweas hp watt x . . NA hte sametinre the Tp wilt Tne [se . at Sf} minishing sate. iaAssu mghonrs! iis accu ee Fs ante the’ “the pixed Aaltas, Ke loaboue vasa be 'Cattes ® cagteal Vy # Ja Mery vs PECK NO eH. : # latouce Ieroks Hornagenous : ips ineweastng + aiff hing ne tues, Explanation of | Law, , ‘ —_~_*erv ——S ber 750 guants! Tsoguant is A poaduce Poh Re eens and shows Che combina tl ons cuceve cohieh yells | the Somme teme! of a hopets ‘puck pect ta . = ee ees : 0 newnwasals sloping: \ @ vonet intew sect @ oonck ~kouch -to the axle @ ast i's the + convex a Rea osha hn, seat Yoana as Tsocoste +. AN Tsocosts 3s a “cose cueve. which shows He Combination of I puts “ which Costs the same Amount of money, Fes the Praducer.' eC Tre ‘7 4 to macaginnl BSE Of Teeny Rete tetont at PARTS 5 Die 1! "2e masginas Rate of Technical seb stitetig| wefess to “the fate we which how one Input factas °F subthituted wit, Rretbhes input factor ~ to aeten Jive, teve | of oud put: .-; combination | ae] capital | 00 metees of inputs eu) Ce) | (ef cloth, A s Q (ao B 10 ° 6 109, c Is | ' | Ge ep we ps fe Ao SLA B= 108 Be to cto = 10% Cx relbale 2 100 De ROLFZH = 100 S 10 1S RO, vou dcosh fs CombhinoGGn af InpUis’ Co Mm NA ER pease SO ae ands and Tsocats are used Ly the qsoe sean coe? tow eh oma a og CoB Ba Sehecl lsat bination to tn the Shope ban peed Chon Peotess of Ine uo? 4s 9,008 Uni got fas 2g 30/000 unt TS Qooe0, uns Labo’ law of seturns tO ascafe: ESSA Sine TT antesnal and extemal) economies to the ’ : t scale: coe nathing but ‘the Factet< inttue, ¥ { (ch the peoducttien gprocess Mn teen yy and €ctterally i'n Leng-eun. Tntesral economies! managerial © tonemits Finan Clal © Conomies Mastedting €ronomtes Risk weaving © Congres ECOnGrn tes ok Rardo Ettemal "© conomien forge eek "CPoremnbes oF 0 OR Cen paHoy CF welfare Of Rardad fonemies EcOnemie,cosh preys. Bacar ever? Aral y S5 Tt is defy eee ae Cor Cas qnety rir CE iifferent 12¥e | x volume Pratt of sates °~ Te ts isepual 6? tata) | Fevenue, a pant ab WETed Mulhern total cost Assurapttonsy Ge eee jrta tata) Fited cat. cast awe seq vegated ond total Vaslabre cost / qotal pice: core zerain canstant (ot) unchanged . - J selling peice” pei “init gonaio conceant cot ats levels of sales... see Reaeat We - WY antyvolume of podiduction sirflaences the costs + PEA CHoypeeesmination of BEp; C—O y pep = FC Bs BER also = — Cr As) Ply Rate Beak eve, va tesg] 4) Ber Se G'n units) ceo CPu = cen-tm'bution per unk J PV tata = contwibubien 1g g Lales (os) 4) Ply satclow = change in pooh ee change in Sales conterbution = selling porce- vewlab ie, Cra les = selling psice) (0) FC + poche soles x ply vate sa yf = Total seles — Boeak even sales 9) mag IX o£ 0 SES volume to eam a dtecived pooh = FCt pp —_— P/V warts’pooh lems ) caleutate Pi patio and Break even point s cece eqn the “folleciie) Ge sales crs) pect t crs) aala 150,090 Qa; 900 0 2 170,090 26,000 elt : - = ely watrom charge in Pe 190 change (0 sabes F 95000~addao ee 10d 12000 0-|so000 = £999 x00 20000 PN sodio = o-as Cex) af a) BEF = Fe AV ao bet 4s consider giz data tir ralew lads oy Fe (fixed east) Solel 1 QafFs 13.0, 080 conteibution — cates x p/y gatlo = lPo000% a-26 = 4 asce Herve, conten utes, a sp-VC~ od ee peat ygsao > FCF AQASOIG FC: Uasod-asodT EC. 1p g00 Aor, : 5 FC pepo SS Plyeoatd BEP= 132.500 oat Rs ayoe0/ a) (iven sales: ps 4000 /- UVC atte cost = RS 2000 |[- Fined cose < FS {6e0/- Melee etee (wn Uaioe Buca even sates, yalim margin obiakety » pwah'é , Haw much Sales art reauired (1s order bo. am, a desrsed poold. af RE 1R09 {- a Hese , Cay] perce a: Deca ) ‘ nteibxtien = sates~ yariabl< covt < YOdIAZQo00 COAG b Ubon = BS Qood u POOFIL aaa = petprottt profit = contsibution ~FC,Pratt = 2000-I¢00 Crsoftt = es 4007) 3) piv vwatia 2 corbtribtOOn 56100 Sales Ply tatio = 3900 R100 — pv wxtia -evgouf (7H) VS 4) Selle value yeeused tn ovdex bU DP =Rs tacof- is FCtOP Pot S609 J Break euen salel valume Bog eee 00s = 3200 PCa oe 3 (BEP_= BYPak even paler Volume = 3200)" ee eee 6) mocegin ot sock = 41000 — 3200 KAIL <. 6090gto BEV VCE BENE. ~ FON (Seas y cormal Ges yeas sales pooh go" 5,907 00e 1,90, 0900 aold 15,009,000 94,0900 eee cae pee ome sone he change in capes pv eatioc — _5,09000 R100 10,0G,000 P/V Tatts Gg /. cos) OS con side ving 2712 few calesloting Fe pres Core6rb utian = Sales x P/V woto conti bution = 15,090,900 ore contsibution > F,$0,000 Now cantsibuton _ P ; cP CR peOoAE FCF Contributes, ~ profit FCs 2,80; 009 — 6,009,900 Se, gpepe L,£00%0 Wig Pree gee Y om | BEP = 3,00,000. | gales volume If the fixed cary ana DEswed pvt Fy and selling perce prey aloud y pind the ts ps cer 000!- Rs (£,007000/- Oe eo ee unit is RS YS /- and yaw! able cost per Sole corte bution = selling variable, pP/v watio= = x09 go » PIN sation = tarps . faleS Volume, 2 FO+DP = \5,00,000 FY/00/0 ene ied ae Phisat'o toy fales valume = 20,08000 Se eae iERe o/ > Sale . alel volume sz 2,20,00,000 QV Agttm has foced cost cf RS 6% 000[- Rs 50/- and voor able, and selling pol ce of Cot 5 RIZ/- Toe prerené fevel ~duct'on js wooo ynfy. oe folowing: : CG) BEP Mh UnIts and Rs Gi) Margin of safely Gi) What if the eLange sm pep if tht, fixed cost neweares 60 RS .B0,000 J7 yl €O PEC lO XUN PSO - Ba y" as 7 . cortsibution “2g ply vate = 20 x 400 ———_—— ean plvsatia > Yar (J) BED IN RSD FC 2) 60,000 c plvcato Var a Bep in units => FC S > FC 84,009 25 x09 Ciou ao iy) mrasgin’ of sateby = Yoou-%o00 masgin of safety — 19000 IA Unibs. WwW LDF Fez Qo,c0e : Ber In BSD 9-000 2 : ar > Q,00,000 ' 2 'n Beep = 33 f inceease J Th sales bomove?, and pachit Jucsing two yeows WICK as Fol taws year satert@n gs poefit in ee Qa1Y 1,40, 000 See RoI 1,660,000 Ra 000 Caleulate Ci) p/v woxtlo VD sales see ured { pesired petit af RS 40/000 I- to Pato _—Vi) peotit when sales ATE 1, 24/000 ay LO) pv warble = 29°90 & ans Qoaed Gy osing aor +08 ca leulach'ng conteibudton © 1, 64900% S25 cordaibudian = U9000 conto bution c FCs contig wen FCs Yours 20008 ig? Sales valunve = £Ct OP 2 200s tums! Pryootid oas = LU0,000 conte bution fo8. 1,20/000 Sales # contsibution = 1, 0,000 XO"as COnMIG AH, = 3000 Condsibut¥on = POH peokid peohlt = Contsibutten= Ee péohite 30000 - 20000= {4 WT! ” yur sales AA PEM OF A COMVNPART doting] yoo ny ee ee ‘ ate yore sales In BRS poobit iD Rs 2a/13 1,§0;000 ee aatd 1, 0,990 26040 you A CEZulred ke cole ulate , a) plv Fado b) BEp ¢) sales Regursed k6 eae a dei geey pooh af RS Yo, 000 /~ 4) pert race when sales awe Rs a, $0000 [4 a ) mrocgie of safety Ok a PO ik of AS $0, 000° (> 4) oe! ab Fe cost.of 2 ptvicd.s Of R013 ee gor) ©) ply Ratio’ n- $0. ac las) oas us ) Qvooo Tas \ J 214 porta fos cateuiating contsibutien = cales x p/v satio con to} bution = 140/000 x0-as ution = 4 ase poof Cont Nav) , contre vo FCTFee conteleution — po oti Fe= U2soG— 25000 (uy) BER cs 174800, = 49,000 oa (c) sales Reeuwited, « FCtoP ee p/V eek’ = 14500+U0000 C2 > 2&8,30/000 (d) contsibutron when sale: are. QsS6; 000 Ls _ Con €o1hut194 = 2,¢¢6,000 mo-Qe Conte bution = 69660 Conesibution= fetpsoh't peotit =ca@ ntolbution — ig Ppooht = ¢200- Jasco 2) cantestb ution =FC+ $0000 G4 i Con EGIbLHON — - 2.500 C0000 ntobutlon, = 64506cangeibuden > yaletox ply cota 6RS99 = (ates xO-as SOHESE. G4S00 Ss as e) masgin of safety = 2, 20,000 ~ 46,000 4) Contribution Fos 2013 > 1,550,000 xo-as zt 32560 conts butter 5) celling POR — vec! able cos. 34809 = 1, 50,000 ~ve VO £ 1,60,0007 34 $00 cotsibullon FOS 4 gold) [2ROV000 xO.ae - Ugsoo UIvoo SS 1,40, 000 —-VvC 408 QoryDE sechor, rer pee THe sates ard pbont OF a” oy) — a years as" as fottous. caleulate matyin of Safety Ci) Total Sates and vamiabt® carts I Fined cost lg 24000 pootit 15 3000 Jn ard break even cates rs zsjooe /- GW) mass Gotal gate S- Beeale SVEN F5lE% Condorbucttarn = fet pIott t 5 quoce+30°O Z.gzooo pl veadtes cs > RU0EO co. TRAY’ aroee Sales = comma button PIV | Z \Qqaoo 0°32, @ (GEL (*) wmose Total fales- Break VO sate. co BU32S- FLO”P fable Cot» \ : Dal Job’ Nos sellin gpeice — Contes Lubes, NO= Busts - RZAOOO [vie s9398 ¢ mantactarer dens endo ee Bt tease he ae prohit of Ait yoo[~ '% a ce y RS 1200]. ps 19008 [- he make A peohl t uo agin Sato ind a) ContBIL UG re qi gh A pil (jy) ser (Dsates fos.a prot of RS yao [~ @ ply wats s Le U0nd ‘> go fs = OA 100 Q es @ contsibutian fos 46000 = Zo00 Foz contsibutian ~ pact & = 3060 — Usd BE pe FO > 600 : PN ware 282 = U3e00 | ofa, S CG cog ea epee cae een ae Ect Pr = agso tue P/VbEAHD TTR,G) EV Ubmleal company Rusniiher Eke Fallowin, data selatiag 9 2. yratt paddiulaty Roly QOIG Teel tates Rsysood BS T0,00° Totel costs piteocs fF! 42002 Q) Find ont ply vada Bei'xed OOCPen ses ii) per > GY mos fox a yooss 4 : , ply vate = 2060 x00 saad - z aif, * = ord (i) Litedl eX penrer Conkvibution FOB 20.20, = £G000 KO-Y4 s)[Qaado0 Fe cordtibuh'on— poottt 2 AYt00 — Soe i SZoeo Bef ec ply a 13,000 “aye = 34500yr @ mos £66 RoI, (re ““usaao - 38 F060 - Wazs) poos fo6 AORO => CeaGe Basco