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    Act 202 Final Assignment (Part-1) Faculty (RKB)

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    Dinha Chowdhury
    The document summarizes the sales, costs, and profits of a tea business over 4 six-month periods from 2019 to 2020. It shows a large drop in units sold and sales in the first half of 2020 due to COVID-19, but an expected increase in the fourth quarter. Materials costs increase from 45% to 50% of sales from 2019 to 2020 due to supply issues. Other costs are reduced, but rent and utilities remain unchanged. Despite lower sales and higher costs in 2020, the business still makes a profit each period.

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    Act 202 Final Assignment (Part-1) Faculty (RKB)

    Uploaded by

    Dinha Chowdhury
    41 views2 pages
    The document summarizes the sales, costs, and profits of a tea business over 4 six-month periods from 2019 to 2020. It shows a large drop in units sold and sales in the first half of 2020 due to COVID-19, but an expected increase in the fourth quarter. Materials costs increase from 45% to 50% of sales from 2019 to 2020 due to supply issues. Other costs are reduced, but rent and utilities remain unchanged. Despite lower sales and higher costs in 2020, the business still makes a profit each period.

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    Act 202 Final

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    The document summarizes the sales, costs, and profits of a tea business over 4 six-month periods from 2019 to 2020. It shows a large drop in units sold and sales in the first half of 2020 due to COVID-19, but an expected increase in the fourth quarter. Materials costs increase from 45% to 50% of sales from 2019 to 2020 due to supply issues. Other costs are reduced, but rent and utilities remain unchanged. Despite lower sales and higher costs in 2020, the business still makes a profit each period.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    41 views2 pages

    Act 202 Final Assignment (Part-1) Faculty (RKB)

    Uploaded by

    Dinha Chowdhury
    The document summarizes the sales, costs, and profits of a tea business over 4 six-month periods from 2019 to 2020. It shows a large drop in units sold and sales in the first half of 2020 due to COVID-19, but an expected increase in the fourth quarter. Materials costs increase from 45% to 50% of sales from 2019 to 2020 due to supply issues. Other costs are reduced, but rent and utilities remain unchanged. Despite lower sales and higher costs in 2020, the business still makes a profit each period.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
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    Act 202 Final Assignment (Part-1) Faculty (RKB)

    2019 2020
    Particulars 6 Months 6 Months 6 Months 6 Months
    (1st Half) (2nd Half) (1st Half) (2nd Half)
    Selling price 16 16 18 18
    per unit (A)
    Units sold (B) 9000 12600 2700 5400

    Sales (A)*(B) 16*9000=144000 16*12600=20160 18*2700=48600 18*5400=97200


    0
    Material cost 64800 90720 24300 48600

    Other operating 21600 30240 7290 14580


    expense
    Gross profit 57600 80640 17010 34020

    Indirect Costs:

    Police 3000 3000 1200 1650


    commission
    Rent 6000 6000 6000 6000

    Utility 1200 1200 1200 1200

    Total indirect 10200 10200 8400 8850


    costs

    Net Profit: Gross profit – Total indirect costs,

    Gross profit 57600 80640 17010 34020

    Total indirect (10200) (10200) (8400) (8850)


    costs
    Net Profit 47400 70440 8610 25170
    Assumptions:

     Due to COVID-19 definitely there will be a huge down sales, because people are staying
    at home and they don’t need a tea from outside. However, it is expected that sales will
    increase in the fourth quarter compared to the previous quarter.

     The materials cost maybe slightly higher due to demand and other harvesting problems.
    So, in 2019 the cost of materials is assumed to be 45% of the sales and due to limited
    supply it will reach 50% of sales in 2020. So, if the material price gets high, the seller
    cannot increase the price because of the tea is not an essential thing during the period.

     Other operating expense will also be reduce in 2020 as these are directly linked to sales
    these are assumed to be 15% of sales.

     The police commission may be he can talk with them and convince the current situation
    and it is assumed police will understand the situation and allow a lesser payment.

     Rent and utility will remain same as there is no compensation provided and they will not
    allow any deduction because of they also need to be survived.

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