A Japanese Soft-drink Company is planning to establish a subsidiary company in Huston to produce mineral water. Based on the estimated annual sales of 40,000 bottles of mineral water cost studies produced the following estimates for Huston subsidiary : Total Annual costs($) Variable Cost as % of total annual cost (%) Material 2,10,000 100 Labour 1,50,000 80 Factory Overheads 92,000 60 Administration Overheads 40,000 35 The Houstonian production will be sold by manufacturer's representatives who will receive a - commission of 8% of the sale price. No portion of the Japanese office expenses is to be allocated to the Indian subsidiary. You are required to: (1) Compute the sale price per bottle to enable to management to realise an estimated 10% profit on sale proceeds in Huston. Calculate the break-even point in rupee sales on the assumption that the sale price per bottle is $ 14. (1I)

A Japanese Soft-drink Company is planning to establish a subsidiary company in Huston to produce mineral water. Based on the estimated annual sales of 40,000 bottles of mineral water cost studies produced the following estimates for Huston subsidiary : Total Annual costs($) Variable Cost as % of total annual cost (%) Material 2,10,000 100 Labour 1,50,000 80 Factory Overheads 92,000 60 Administration Overheads 40,000 35 The Houstonian production will be sold by manufacturer's representatives who will receive a - commission of 8% of the sale price. No portion of the Japanese office expenses is to be allocated to the Indian subsidiary. You are required to: (1) Compute the sale price per bottle to enable to management to realise an estimated 10% profit on sale proceeds in Huston. Calculate the break-even point in rupee sales on the assumption that the sale price per bottle is $ 14. (1I)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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