Q1) The data related to Company X, Company Y and Company Z is as given below.
Company X. Company Y. Company Z
Budgeted sales in units. 10,000. 10,000. 10,000
Budgeted selling price per unit. Rs. 2.00. Rs. 2.00. Rs. 2.00
Budgeted variable costs per unit. Rs. 1.50. Rs. 1.25. Rs. 1.00
Budgeted fixed expenses
Total. Rs. 3,000. Rs. 5,500. Rs. 8,000
Budgeted capacity. 80% 80% 80%
From the information given above you are required to calculate for each company :
(a) The budgeted profit.
(b) The budgeted break-even point in unit sales.
(c) The budgeted margin between break-even point and budgeted sales expressed
as a percentage of total capacity.
(d) The impact on profits of a ± 10% deviation in budgeted sales.
Comment briefly on the effect of this in relation to the distribution between the
companies’ fixed and variable expenses.