Revenues

Medical Supplies
Doctor Fees
Managers Salary
Allocated Office Space Cost
Depreciation on Equipment
Miscellaneous Expenses
Allocated Administrative Overheads
Total Cost

600,000
40,000
290,000
48,000
10,000
32,500
25,000
30,000
475,500
67200

Proft and Loss

Author:
Due to resale at lesser than
market price N

Revenue
Cost of Outsourcing
Author:
Medical Supplies
290000*0.25
Doctors Fees Fixed
Doctors Fees Variable
Managers Salary
Allocated Office Space Cost
Depreciation on Equipment
Miscellaneous Expenses
Allocated Administrative Overheads
Opportunity Cost (1) Medicine
Opportunity Cost (1) Equipment
c
Costs
Other Income
b
Medical Resale
Equipment Sale
Additional Income
(a+b+c)
Profit

Option Author:
1
290000*0.75

600,000
360,000 8,000 -

600,000
360,000
8,000

72,500
25,000
10,000
32,500
15,000
30,000
22,400

72,500
25,000
10,000
32,500
15,000
30,000

575,400 -

553,000

44,800

69,400

Assumptions
Time value of money is constant
No revenue gain over the years
Author:
The excess medical
supplies not being used are sold at the first year
Assuming 80% is being sold
at end of 1st Year

N+1

47,000
163,400

Author:
Out of 80K Stock, 32K + 32K is already
consumed, leaving 16K stock. Additionally 16K
to be procured at 120% of original price

67200

ption Author:
1
N+2
290000*0.75

63,400

96000

600,000
360,000
8,000

Option 2
N+1
N+2
600,000
600,000
600,000
100,000
### 100,000
32,000 32,000 19,200

72,500
25,000
10,000
32,500
15,000
30,000

217,500
48,000
10,000
32,500
10,000
30,000

Option 3
N
-

553,000

480,000 -

217,500
48,000
10,000
32,500
10,000
30,000

480,000 -

217,500
48,000
10,000
32,500
10,000
30,000

467,200

47,000

120,000

120,000
372,800

132,800

N+1
600,000
440,000
30,000
25,000
10,000
32,000
27,500
564,500
64,000
70,000
30,000
199,500

600,000
440,000
30,000
25,000
10,000
-

505,000

30,000
125,000
449,500

A
S
g
y

ption 3

49,500

N+2
-

600,000
440,000
30,000
25,000
10,000
Author:
Space is still being used and
generating 30K revenue per
year

505,000

30,000
125,000

Year
Total Capacity
Utilized Capacity
Per Unit Selling Price and Costs (Rs.)
Selling Price
Direct Material
Direct Labor
Variable Mfg. Overheads
Fixed Mfg. Overheads
Variable Selling Expense
Fixed Selling Expense
COGS
Profit Per Piece
No. Of Units Sold
Total PBIT
P&L
Revenue
Cost
PBIT
Interest
PBT
Tax
PAT
Net Income Lost
Profit
NPV
Initial Investments
PAT
Tax
Tax Shield Because of Interest
NOPAT
Depreciation
Increase in Networking Capital
Working Capital Value at end
Residual Value of Asset
FCF
Opportunity cost
Discount Factor (12%)
Present Value
Net Present Value

1
100000.00
70%

2
100000.00
80%

20
5
4
2
2
1
2
16.00
4.00
70000.00
280000.00

21.00
5.20
4.16
2.08
2.08
1
2
16.52
4.48
80000.00
358400.00

1400000.00
1120000
280000.00
-60000
220000.00
-66000
154000.00
-10000.00
144000.00

1680000.00
1321600
358400.00
-60000
298400.00
-89520
208880.00
-10000.00
198880.00

154000.00
-66000

208880.00
-89520

800000

3
100000.00
80%

4
100000.00
90%

5
100000.00
90%

22.05
5.41
4.33
2.16
2.16
1
2
17.06
4.99
80000.00
399136.00

23.15
5.62
4.50
2.25
2.25
1
2
17.62
5.53
90000.00
497634.12

24.31
5.85
4.68
2.34
2.34
1
2
18.21
6.10
90000.00
549176.73

1764000.00
1364864
399136.00
-60000
339136.00
-101740.8
237395.20
-10000.00
227395.20

2083725.00
2187911.25
1586090.88 1638734.5152
497634.12
549176.73
-60000
-60000
437634.12
489176.73
-131290.236 -146753.02044
306343.88
342423.71
-10000.00
-10000.00
296343.88
332423.71

237395.20
-101740.8

306343.88
342423.71
-131290.236 -146753.02044

Initial Investments
Residual Value after 5 years
Receivables collection period
Payables period
Inventory
Opportuity lost because of new project
WACC (Discount Rate)
Increase in Cost of Debt
Increase in Interest
Cost of Debt
Interest
Tax Rate

800000
50000
2
1
2
10000
0.12
0.015
1200
0.075
60000
30%

months
month
months

Cost of Debt has been increased because of new loan

Budgeted Market
Actual Market

A
B
Total

100000
110000

Budget (produced and sold)

Actual (produced and sold)
Selling Price
Selling Price
Sales Units
Sales Units
p.u. (Rs)
p.u.
5000
20
4800
22
5000
40
6400
38
10000
11200
Cost Per Lbs
Raw Material

Budgeted

X
Y

Consumption

Actual

Budgeted

0.2
0.3

0.19
0.32

Variable Cost/unit

A
B

Direct Labour

Overhead

Variable cost

0.7
0.7

20
20

0.7
0.7

21.4
21.4

Unit Variable
Cost
21.40
21.40

Budgeted
Unit
Contribution
Margin
-1.40
18.60

20.00
40.00

Sales Revenue

Direct Material Cost

X
Y

2.1428571429
0.9821428571

Direct Material

Selling Price

A
B

2
1

Budgeted

Income

A
B

Actual

Sales volume
(units)
5,000
5,000
10,000

Budget
Selling Price

Sales volume
(units)

20.00
40.00

5,000
5,000

Budget Sale at Actual Price

Sales volume
(units)
100,000
200,000
300,000

Selling Price
22.00
38.00

Budget

Weight (lb)
Rs./Lb
20000
0.2
10000
0.3
30,000

Actual

Total
4000
3000

Weight (lb)
24000
11000
7,000
35,000

Labour
Standard Hours Standard Rate
A
B

10000
10000

10.00
10.00

Actual Rate

Actual Hours

11.00
11.00

9428.57
12571.43

Overhead
Actual
8000

Budgeted

Absorbed

7000

7840.00

Spending
Variance
Budgeted Actual
-1000.00
Net Variance

Volume
Variance
Absorbed Budgeted
840.00
-160.00

Actual
Direct Material

Direct Labour

Overhead

Variable cost

0.72
0.72

21.61
21.61

0.71
0.71

23.04
23.04

Total

Selling Price

-7000
93000
86000

20.00
40.00

Budget Sale at Actual Price

Sales volume
(units)
5,000
5,000

Actual Selling at Budgeted Price

Unit
Unit Variable
Sales volume
Contribution
Cost
(units)
Margin
23.04
-3.04
4,800
23.04
16.96
6,400
10,000

Actual Sale at Budgeted Price

Sales volume
(units)
110,000
190,000
300,000

Selling Price

Sales volume
(units)

20.00
40.00

4,800
6,400

Sales volume
(units)
96,000
256,000
352,000

Total
-14606
108526
93920

Actual Sale at Actual Price

Selling Price
22.00
38.00

Actual

Rs./Lb
0.19
0.32

Total

Direct Material Direct Material

Price Variance Mix Variance
4560
240
-800
3520
-220
-300
8,080
20
-1,100

Act. Qty @ Std.

Mix
Direct Material
Price Variance
23333.33
-133.33
11666.67
200
67

Flexible Budget Variance

Labour Rate
Variance
-9428.57
-12571.43
-22000.00

Usage Variance
5714.29
-25714.29
-20000.00

Actual Selling at Actual Price

Unit
Unit Variable
Sales volume
Selling Price
Contribution
Cost
(units)
Margin
22.00
23.04
-1.04
4,800
38.00
23.04
14.96
6,400
10,000

Total
-5006
95726
90720

Income Variance:

-3200 UF

Sales Revenue Variance:

-3,200 UF

Direct Material Cost Variance:

-1,080 UF

Direct Material Price Variance:

Direct Material Mix Variance:
Flexible Budget Variance = Price Variance + Usage Variance

20 F
-1,100 UF
-1,080

Direct Material Mix Variance:

Direct Material Yield Variance:
DM Usage Variance = Mix Variance + Yield Variance :

67 F
-1,167 UF
-1,100

Actual Sale at Actual Price

Sales volume Sales volume
(units)
(units)
4,800
6,400

105,600
243,200
348,800

Direct
Material Mix
Variance
-666.67
-500
-1,167

Labour Rate Variance:

Usage Variance:

-22,000 UF
-20,000 UF

Net Overhead Variance:

-160.00 UF

Cost Pool
Purchase Orders
Machine Setups
Electricity

Overhead
Cost
$30,000
$50,000
$10,000

Cost Driver

Unit OH Cost

50 orders
100 setups
10,000 Kilowatt hours

600
500
1

Job M1

Job M2

Units Produced

500

1000

Purchase orders
Set up
Kilowatt Hours

15
20
500

Unit Overhead Allocation:

9000
10000
500
19500
39

10
10
1000

6000
5000
1000
12000
12

EZ Corp.
Small
Sales Mix
Selling Price
Variable Cost Per Bag
Fixed Cost Contribution
Fixed cost value in Sales Mix

Fixed Expense
No of Sets to be sold

Medium

Large

20

100
60
40
800

150
95
55
275
1165

250
160
90
90

2027562
1740.40 ~ Min
34820
8705

1741
1741