|
Statement Showing calculation of operating cost, Profit and selling price |
|||||||
|
Number of cards |
|||||||
|
Particulars |
Hours |
Rate per Invitation |
100 |
300 |
550 |
1000 |
1250 |
|
100 |
Cost |
||||||
|
preparation work |
4 |
30 |
£ 120.00 |
£ 120.00 |
£ 120.00 |
£ 120.00 |
£ 120.00 |
|
Design Work |
120 |
£ 120.00 |
£ 120.00 |
£ 120.00 |
£ 120.00 |
£ 120.00 |
|
|
Paper Card |
80 |
£ 80.00 |
£ 240.00 |
£ 440.00 |
£ 800.00 |
£ 1,000.00 |
|
|
Printing |
30 |
£ 30.00 |
£ 30.00 |
£ 30.00 |
£ 30.00 |
£ 30.00 |
|
|
Direct Labor |
2 |
23 |
£ 46.00 |
£ 138.00 |
£ 253.00 |
£ 460.00 |
£ 575.00 |
|
Fixed overheads |
150 |
£ 150.00 |
£ 150.00 |
£ 150.00 |
£ 150.00 |
£ 150.00 |
|
|
Total cost |
£ 546.00 |
£ 798.00 |
£1,113.00 |
£ 1,680.00 |
£ 1,995.00 |
||
|
Profit |
50% |
£ 273.00 |
£ 399.00 |
£ 556.50 |
£ 840.00 |
£ 997.50 |
|
|
Total sales |
£ 819.00 |
£ 1,197.00 |
£1,669.50 |
£ 2,520.00 |
£ 2,992.50 |
||
|
Selling price per 100 |
£ 819.00 |
£ 399.00 |
£ 303.55 |
£ 252.00 |
£ 239.40 |
|
Statement Showing calculation of Profit for each partner |
||||
|
Partners |
A |
B |
C |
|
|
Profit Sharing Ratio |
50% |
30% |
20% |
|
|
No. of Cards |
Profit |
Share of Each Partner |
||
|
100 |
£ 273.00 |
£ 136.50 |
£ 81.90 |
£ 54.60 |
|
300 |
£ 399.00 |
£ 199.50 |
£ 119.70 |
£ 79.80 |
|
550 |
£ 556.50 |
£ 278.25 |
£ 166.95 |
£ 111.30 |
|
1000 |
£ 840.00 |
£ 420.00 |
£ 252.00 |
£ 168.00 |
|
1250 |
£ 997.50 |
£ 498.75 |
£ 299.25 |
£ 199.50 |
The increase in paper cost will result in increase in selling price. However, if the old selling price is maintained then it becomes unprofitable. The calculations are shown below:
|
Statement Showing calculation of operating cost, Profit and selling price |
|||||||
|
Number of cards |
|||||||
|
Particulars |
Hours |
Rate per Invitation |
100 |
300 |
550 |
1000 |
1250 |
|
100 |
Cost |
||||||
|
preparation work |
4 |
30 |
£ 120.00 |
£ 120.00 |
£ 120.00 |
£ 120.00 |
£ 120.00 |
|
Design Work |
120 |
£ 120.00 |
£ 120.00 |
£ 120.00 |
£ 120.00 |
£ 120.00 |
|
|
Paper Card |
90 |
£ 90.00 |
£ 270.00 |
£ 495.00 |
£ 900.00 |
£ 1,125.00 |
|
|
Printing |
30 |
£ 30.00 |
£ 30.00 |
£ 30.00 |
£ 30.00 |
£ 30.00 |
|
|
Direct Labour |
2 |
23 |
£ 46.00 |
£ 138.00 |
£ 253.00 |
£ 460.00 |
£ 575.00 |
|
Fixed overheads |
150 |
£ 150.00 |
£ 150.00 |
£ 150.00 |
£ 150.00 |
£ 150.00 |
|
|
Total cost |
£ 556.00 |
£ 828.00 |
£ 1,168.00 |
£ 1,780.00 |
£ 2,120.00 |
||
|
Profit |
50% |
£ 278.00 |
£ 414.00 |
£ 584.00 |
£ 890.00 |
£ 1,060.00 |
|
|
Total sales |
£ 834.00 |
£ 1,242.00 |
£ 1,752.00 |
£ 2,670.00 |
£ 3,180.00 |
||
|
Selling price per 100 |
£ 834.00 |
£ 414.00 |
£ 318.55 |
£ 267.00 |
£ 254.40 |
||
|
Existing selling Price |
£ 819.00 |
£ 399.00 |
£ 303.55 |
£ 252.00 |
£ 239.40 |
||
|
Profit based on old selling price |
|
|
£ 263.00 |
-£ 429.00 |
-£ 864.45 |
-£ 1,528.00 |
-£ 1,880.60 |
The increase in fixed costs results in increase in selling price. If the selling price is not revised then it becomes unprofitable.
|
Statement showing Calculation of Profit on change in fixed cost |
|||||||||
|
Number of cards Printed |
|||||||||
|
Particulars |
Old Rate |
Percentage Increase |
Hours |
Rate per |
100 |
300 |
550 |
1000 |
1250 |
|
100 |
Cost |
||||||||
|
Preparation work |
30 |
25% |
4 |
£ 37.50 |
£ 150.00 |
£ 150.00 |
£ – |
£ – |
£ – |
|
Design Work |
120 |
25% |
£ 150.00 |
£ 37.50 |
£ 37.50 |
£ 37.50 |
£ 37.50 |
£ 37.50 |
|
|
Paper Card |
80 |
£ 80.00 |
£ 80.00 |
£ 240.00 |
£ 440.00 |
£ 800.00 |
£ 1,000.00 |
||
|
Printing |
30 |
£ 30.00 |
£ 30.00 |
£ 80.00 |
£ 80.00 |
£ 80.00 |
£ 80.00 |
||
|
Direct Labour |
23 |
2 |
£ 23.00 |
£ 46.00 |
£ 138.00 |
£ 253.00 |
£ 460.00 |
£ 575.00 |
|
|
Fixed overheads |
150 |
25% |
£ 187.50 |
£ 187.50 |
£ 23.00 |
£ 23.00 |
£ 23.00 |
£ 23.00 |
|
|
Total cost |
£ 531.00 |
£ 668.50 |
£ 833.50 |
£ 1,400.50 |
£ 1,715.50 |
||||
|
Profit |
50% |
£ 265.50 |
£ 669.00 |
£ 834.00 |
£ 1,401.00 |
£ 1,716.00 |
|||
|
Total sales |
£ 796.50 |
£ 1,337.50 |
£ 1,667.50 |
£ 2,801.50 |
£ 3,431.50 |
||||
|
Selling price per 100 |
|
£ 796.50 |
£ 445.83 |
£ 303.18 |
£ 280.15 |
£ 274.52 |
|||
|
Existing selling Price |
£ 819.00 |
£ 399.00 |
£ 303.55 |
£ 252.00 |
£ 239.40 |
||||
|
Profit based on old selling price |
|
|
|
|
£ 288.00 |
-£ 269.50 |
-£ 529.95 |
-£ 1,148.50 |
-£ 1,476.10 |
Addison, P.S., 2017. The illustrated wavelet transform handbook: introductory theory and applications in science, engineering, medicine and finance. CRC press.
Damodaran, A., 2016. Damodaran on valuation: security analysis for investment and corporate finance (Vol. 324). John Wiley & Sons.
Härdle, W.K., Hautsch, N. and Overbeck, L. eds., 2017. Applied quantitative finance (Vol. 2). Springer.
Minsky, H., 2016. Can” it” happen again?: essays on instability and finance. Routledge.
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