COSMETIC Ltd - Solution

COSVANI COSLAVI COSMENTI TOTAL

Volumes of sales 2 000 1 000 3 000 6 000
Unit selling price 65,00 300,00 140,00
Sales revenues 130 000 300 000 420 000 850 000
Variable costs 75 000 160 000 220 000 455 000
- raw materials 60 000 50 000 100 000 210 000
- labour 10 000 100 000 100 000 210 000
- energy 5 000 10 000 20 000 35 000
Contribution margin 55 000 140 000 200 000 395 000
Unit contribution margin 27,50 140,00 66,67
Contribution margin rate 42,3% 46,7% 47,6% 46,5%
Direct fixed costs 25 000 40 000 80 000 145 000
- salaries & wages 20 000 25 000 30 000 75 000
- depreciation 5 000 15 000 50 000 70 000
Indirect fixed costs 240 000
Total costs 840 000
Profit 10 000

Break-even points (direct) 909 286 1 200

BEP in sales (direct) 59 091 85 714 168 000
BEP in sales (with constant mix) 828 481

Calculation of Full costs

Allocation basis: labour costs
% of labour costs 4,8% 47,6% 47,6% 100,0%
Allocated indirect costs 11 429 114 286 114 286 240 000
Profit 18 571 -14 286 5 714 10 000

Allocation basis: volumes of sales

% of volumes of sales 33,3% 16,7% 50,0% 100,0%
Allocated indirect costs 80 000 40 000 120 000 240 000
Profit -50 000 60 000 0 10 000

Allocation basis: sales revenues

% of sales revenues 15,3% 35,3% 49,4% 100,0%
Allocated indirect costs 36 706 84 706 118 588 240 000
Profit -6 706 15 294 1 412 10 000

Allocation basis: contribution margin

% of contribution margin 13,9% 35,4% 50,6% 100,0%
Allocated indirect costs 33 418 85 063 121 519 240 000
Profit -3 418 14 937 -1 519 10 000
Apr 2010