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 CSS Forums Solution 7(a) paper 1 2016

#1
Thursday, December 15, 2016
 Junior Member Join Date: Dec 2014 Posts: 22 Thanks: 0 Thanked 1 Time in 1 Post
Solution 7(a) paper 1 2016

Q.7 (a) Audit & Accountancy (Paper1.CSS 206) Solution
First Step is to find Contribution for each product
Formula =P/V ratio= Contribution / Sales
= (Sales – Variable cost)/Sales

(Rs.000)
Oxygen=> 50% = (1250-x)/1250
X= 625
Nitrogen=> 40 %=( 2000-x)/2000
X= 1200
Accetlyne=> 30 %=( 3000-x)/3000
X= 2100
Second step is Cumulative PV ratio
Formula is Combined Contribution/Combined sales*100
Combined Contribution= (625+800+900)
Combined Sales= (1250+2000+3000)
Cumulative PV Ratio= 2325/6250*100=37.2%
To find out Profit/loss of the budgeted results
PV ratio=Fixed + (profit/loss)/sales
37.2%=2511+x/6250
X= (186) loss
Second half of question is to eliminate loss implying break even
Break-even Sales = Sales * P/V ratio= Fixed cost
X*37.2%=2511
X=6750
Sales value of each product according to the sales mix
Oxygen=6750*20% =1350
Nitrogen=6750*32% =2160
Acetylene=6750*48% =3240
I hope all my effort paid off.
Kind Regards (aly.syyed@gmail.com)
#2
Saturday, January 07, 2017
 Junior Member Join Date: Oct 2016 Location: allahoo chowk johar town lahore Posts: 5 Thanks: 0 Thanked 0 Times in 0 Posts
Accounts & auditing

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#3
Saturday, January 07, 2017
 Senior Member Join Date: Mar 2013 Location: Rawalpindi Posts: 104 Thanks: 39 Thanked 6 Times in 6 Posts

from which book you covered this topic?

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#4
Sunday, January 08, 2017
 Senior Member Join Date: Mar 2013 Location: Rawalpindi Posts: 104 Thanks: 39 Thanked 6 Times in 6 Posts

Your first part is right but second part goes like this:

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#5
Sunday, January 08, 2017
 Senior Member Join Date: Mar 2013 Location: Rawalpindi Posts: 104 Thanks: 39 Thanked 6 Times in 6 Posts

Sorry for duplication..

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#6
Sunday, January 08, 2017
 Junior Member Join Date: Dec 2014 Posts: 22 Thanks: 0 Thanked 1 Time in 1 Post

He has asked about total sales value.you have worked out the increase in sales value.revisit it
#7
Sunday, January 08, 2017
 Senior Member Join Date: Mar 2013 Location: Rawalpindi Posts: 104 Thanks: 39 Thanked 6 Times in 6 Posts

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#8
Monday, January 09, 2017
 Junior Member Join Date: Dec 2014 Posts: 22 Thanks: 0 Thanked 1 Time in 1 Post

aviod netspeak.refrain from using u again