The performance of two of its branches one big branch and the other small

The performance of two of its branches one big branch

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The performance of two of its branches (one big branch and the other small branch) in one state is summarized below: i. Direct selling Expenses 7.5 7 8.5 j. Direct Advtg and Sales Promotion 5 5.5 7.5 k. Branch office expenses 6.5 7.2 8 l. Branch warehouse Expenses 4 6 6.5 m. H.O.Sales overheads allocated 1.8 2 2.2 n. H.O. Admn Overheads allocated 4.8 5.2 6 o. Total Expenses 37.6 41.9 49.1 o. Net Profit (g)-(o) 14 6.9 (1.1) Market share Achieved (percent) 7.6 9.2 11.5 184
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PROBLEMS FOR EXERCISE Table no: 22 (All figures in Rs. Lacs) Comment on the performance of these branches on issues such as: a. Management of schemes discounts. b. Expenses control. c. Working capital control. d. Warehouse functioning and. e. Any other parameters that attract your attention. Particulars Branch 1 Branch 2 Revenue a. Gross sales (average per month) 336.5 99 b. Sales returns(average per month) 47.7 3.67 c. Net Sales (average per month) (a-b) 288.8 95.33 d. Scheme discounts (average per month) 27.55 4.43 Expenses (average per month) e. Employees Cost 2.88 0.66 f. Sales Promotion 0.46 0.12 g. Traveling 0.68 0.29 h. Freight and services 1.06 0.14 i. Establishment and others 9.05 2.56 j. Total Expenses 14.13 3.77 Working capital k. Stocks (Average monthly) 14.13 3.77 l. Outstandings (Average Monthly) 514 250 m.Bank balance at the month end 228 148 185
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PROBLEMS FOR EXERCISE 17.ABC Ltd produces a single product in three sizes A, B and C. The following expenses incurred on marketing are sought to be traced to each of these sizes using the basis indicated below: Table no: 23 The following additional information is also available: Table no: 24 Expenses Amount (Rs.) Basis of Allocation a. Sales Salaries 100000 Direct charge b. Sales commissions 60000 Sales turnover c. Sales office expenses 20960 No. of orders d. Advertising (General) 50000 Sales turnover e. Advertising (specific) 220000 direct charge f. Packaging 30000 Total volume in cubic feet g. Delivery expenses 40000 ——do——- h. Warehouse Expenses 10000 ——do——- i. Credit collection expenses 12960 No. of orders Total 543920 Particulars Total Size A Size B Size C a. No. of sales people (all paid salaries) 10 4 5 1 b. Units sold (Nos) 10400 3400 4000 3000 c. No. of orders 1600 700 800 100 d. Percentage of Specific advertising 100 30 40 30 e. Sales Turnover (Rs.) 2000000 580000 800000 620000 f. Volume in cubic feet per unit of product 5 8 17 186
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PROBLEMS FOR EXERCISE Prepare a statement showing how these costs may be traced to each of these sizes on the basis of information furnished above: Also find out the following viz. a. Marketing cost per unit sold of each size b. Marketing cost as a percentage of sales turnover for each size Solution: Table no: 25 Particulars Total Size A Size B Size C Sales Turnover (Rs.) 2000000 580000 800000 620000 No. of sales people (all paid salaries) 10 4 5 1 Total salaries 100000 40000 50000 10000 Sales commission 60000 17400 24000 18600 No. of orders 1600 700 800 100 Sales office expenses 20960 9170 10480 1310 Advertising (General) 50000 14500 20000 15500 Advertising (specific) 220000 30:40:30 66000 88000 66000 Packaging 30000 Volume cu ft 5:8:17 5000 8000 17000 Delivery expenses 40000 Volume cu ft 5:8:17 6666 10667 22667 Ware house expenses 10000 Volume cu ft 5:8:17 1667 2666 5666 Credit collection expenses 12960 No of orders 7:8:1 5670 6480 810 187
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PROBLEMS FOR EXERCISE 18.Cute Toys Ltd. has received an enquiry for 10000 nos of CUTIE doll for which cost estimates are as under: a. Direct material per unit Rs. 100.00 b. Direct Labour Cost per unit Rs. 40.00 c. Direct expenses per unit Rs. 80.00
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