Bill French Essay

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freJHJSBJH Case : Bill French The Workings have been attached in the following Excel Sheet : Q1) Assumptions : | | | | 1) He has done the calculation using Average Figures of Product A, B & C. [Cooper's Concern] | 2) He also assumed that the ratio of Products A,B & C will remain constant next year. [Cooper's Concern] | 3) There would be no increase in Fixed assets/Fixed costs | | 4) There would be no change in Salary Structure and other variable costs | 5) There would be no change in the Dividend policy of the company | 6) When represented graphically, the behaviors of total revenues and total costs are linear in relation to units sold in a time period | 7) Selling price, variable cost per unit and total fixed costs are known and constant | Q2) Break even analysis by considering individual products A) Not taking into account Union Demand i.e no effect on Variable Cost | | Product A | Product B | Product C | Sales at Full Capacity | 2,000,000 | | | | | | | | | Actual Sales volume | 1,750,000 | 400,000 | 400,000 | 950,000 | Unit Sales price | 1.158857143 | 1.67 | 1.5 | 0.8 | Total sales revenue | 2028000 | 668000 | 600000 | 760000 | Variable Cost/Unit | 0.564285714 | 1.25 | 0.625 | 0.25 | Total Fixed Cost | 640000 | 170000.0000 | 275000.0000 | 195000.0000 | | | | | | Net Profit | 400500 | -2000 | 75000 | 327500 | Tax(0.5) | 200250.0000 | | | | Profit After tax | 200250.0000 | | | | Ratio | | | | | Variable Cost to Sales | 0.4869 | 0.7485 | 0.4167 | 0.3125 | Variable Income to Sales | 0.5131 | 0.2515 | 0.5833 | 0.6875 | Utilization of Capacity | 0.8750 | 0.2 | 0.2 | 0.4750 | B) Taking into Account Union Demand i.e. Variable Cost increases by 10% Sales at Full Capacity | 2,000,000 | | | | | | | | | Actual Sales

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