total costs towards salaries commissions and business expenses work out to Rs

Total costs towards salaries commissions and business

This preview shows page 182 - 185 out of 203 pages.

total costs towards salaries, commissions and business expenses work out to Rs. 150000 per sales persons, Rs. 250000 per field officer, and Rs. 400000 per branch manager. Further total cost of operating the Branch offices and Godowns as well as the cost of carrying inventory works out to Rs. 300,00,000. Assume that you have recently taken over as General Manager – Marketing in the Company, which has sales turnover of Rs. 42,25,00,000. Your first assignments is to advice the management on out sourcing the distribution to an external entity which expects discount of 15 percent on sales prices. Further the additional advertising expenses are estimated to be Rs. 100,00.000. if the company decides to do away with the existing direct distribution and selling arrangement. What will be your recommendation? 14.Prabha Nursing Homes has the following three sources of Income: I. Room charges per day A. Rs. 1000 for private room B. Rs. 600 for semi private room C. Rs. 200 for general ward. II. Operation theatre charges: Rs. 1500 per man-hour Following additional Information is also available: A. Estimated Room usage Data 182
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PROBLEMS FOR EXERCISE Table no: 19 E. Estimated Surgical Operations Data Table no: 20 Prepare a detailed revenue statement. 15.The performance of the three branches of an industrial consumables manufacturing company is summarized below: Table no: 21 (All figures in Rs. Lacs) Patient Need No. of Patients expected per year Average stay (Days) percent Occupancy Private Semi- Private General Ward Medical attention 1000 6 10 50 40 Surgical attention 1200 12 20 70 10 Type of Operations No. of Operations No. of hour per operation No. of persons required for operation Minor surgery 600 1 3 Major surgery 600 2 6 Description Branch 1 Branch 2 Branch 3 Revenue a. Sales 129 139.8 161.2 b. Allocated Interest 1.5 1.6 1.9 c. Total Revenue 130.5 141.4 163.1 d. Cost of sales standard 72 84.5 105 e. Factory Variance 6.9 8.1 10 f. Total Cost of sales 78.9 92.6 115 g. Gross Margin (c) - (f) 51.6 48.8 48.1 Expenses h. Selling salaries 8 9 10.5 183
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PROBLEMS FOR EXERCISE Discuss the relative performance of the three branches in terms of: a. Quality and quantity of sales achieved. b. Expense control exercised in each branch, and. c. Any other parameter you may think of. Do you have any recommendation to make regarding the presentation of the branch performance data? Also comment whether the company should continue to maintain the Branch 3. 16.ABC Company markets a range of home appliances under brand name ‘HOMEMAKER’ through a network of branches. To remain competitive the company runs a series of schemes and promotional campaigns throughout the year to attract dealers and consumers attention and loyalty. In a fiercely competitive market place the company follows a strong 'dealer push' strategy backed by a subtle 'brand pull' advertising. To ensure this, the branch managers are given a high degree of freedom to take on the spot decisions, provided they deliver an overall consistent performance.
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