business plan on bicycle
TRANSCRIPT
ARE WE FAMILIAR WITH THIS?
NOBODY CAN ESCAPE.
WHAT IS HAPPENING WITH US IN THIS CASE?
If you are
clever than
teachers…
WHERE ARE YOU GOING?……SIT DOWN
If you are
not...
GO LATE IN THE CLASS AND…?
Have to
find out
a solution
from this..
AN EASY SOLUTION
ROADSTAR BICYCLE CO. LTD. GO AHEAD WITH A ECO-FRIENDLY VEHICLE
ROADSTAR BICYCLE COMPANY LTD.
312/a, Panthapath, Dhaka.
BOARD OF DIRECTORS
AREA OF OPERATION
Dhaka
Chittagong
Rajshahi
Brisal
Khulna
Rangpur
Sylhet
Maymensingh
PRODUCT RANGE
Kids Bicycle
Men Bicycle
Women Bicycle
Cycling helmet
Navigation device
KIDS BICYCLE
Features:
Easily handling
Smooth running
Strong
supportive wheel
Comfortable
MEN BICYCLE
Features:
Strong body
Easy moving
Hydraulic
break
Front & back
light
Gear system
BICYCLE FOR GIRLS
Features :
Easy ride
Light
Gear
Comfortable
CYCLING HELMET
Why our helmet?
Safer
Easy portable
Strongest
Well vantilated
NAVIGATOR
Features :
Navigation
service
Speed meter
Solar charger
Anti-
harrasement key
GPS facility
LATEST MANAGEMENT ACCOUNTING TOOLS
Just in time(JIT) system
PULL SCHEDULING
TOTAL QUALITY MANAGEMENT
LIST OF DIFFERENT COST
Particulars Variable
cost
Fixed cost Product
cost
Period
cost
Direct materials:
8,000,000
8,000,000
Direct labor 5,000,000 5,000,000
Manufacturing overhead 3,000,000 3,000,000
Administrative cost 700,000 700,000
Selling cost 300,000 300,000
Advertising cost 500,000 500,000
Sells commission 500,000 500,000
Depreciation 500,000
500,000
Insurance cost 500,000
500,000
TOTAL FIXED COST
fixed cost
2.5m
0 3000
Number of unit
Co
st
pe
r u
nit
VARIABLE COST PER UNIT
variable cost
5833
0
1
Unit
Co
st
JOB ORDER COSTING
Predetermined overhead rate
= Estimated total manufacturing overhead cost
Estimated total amount of allocation base
= 3,000,000/ 40,000 Direct labor hour
= Tk.75
Overhead Applied to the job
= (POHR*Actual direct labor hour)
= 75* 12.5
= Tk.937.5
JOB ORDER COSTING
ROADSTAR BICYCLE CO. LTD.’S
SCHEDULE FOR COST OF GOODS SOLD
Particulars Amount(tk.) Amount(tk.)
Beginning Inventory 1,000,000
(+) Raw material Purchase 7,000,000
Raw material available for production 8,000,000
(-)Ending raw material inventory 1,300,000
Raw material used in production 6,700,000
(+)Direct labor 5,000,000
(+)Manufacturing Overhead 3,000,000 8,000,000
Total Manufacturing cost 14,700,000
SCHEDULE FOR COST OF GOODS SOLD (CONT.)
Praticulars Amount Amount
Total manufacturing cost 14,700,000
(+)Beginning work in process inventory 2,500,000
Total work in process for the period 17,200,000
(-)Ending work in process 1,200,000
Cost of goods manufactured 16,000,000
(+)Beginning finished goods inventory 4,000,000
Goods available for sale 20,000,000
(-)Ending finished goods inventory 2,500,000
Cost of goods sold 17,500,000
ROADSTAR BICYCLE CO. LTD.’S
INCOME STATEMENT(CONTRIBUTION FORMAT)
Particulars Amount(tk.) Amount(tk.)
Sales 22,500,000
(-)Variable cost:
Direct material
Direct labor
Manufacturing overhead
Sales commission
Others cost
6,700,000
5,000,000
3,000,000
500,000
2,300,000
17,500,000
Contribution margin 5,000,000
(-)Fixed cost:
Administrative cost
Insurance cost
Depreciation cost
Advertisement cost
1,000,000
500,000
500,000
500,000
2,500,000
Net operating income 2,500,000
CONTRIBUTION MARGIN RATIO (CM RATIO)
Total Per Unit CM Ratio
Sales (3000bicycles) 22,500,000.00 7,500.00 100%
Less: Variable expenses 17,500,000 5,833 78%
Contribution margin 5,000,000 1,667.00 22%
Less: Fixed expenses 2,500,000
Net operating income 2,500,000.00
Roadstar Bicycle Company
Contribution Income Statement
For the end of the year 2014
$5,000,000 ÷ $22,500,000 = 22%
6-32
BREAK EVEN POINT
In unit sales:
Profit = Unit CM * Q – Fixed expenses
0 = 1666.7*Q – 2,500,000
Q = 1500 units
In dollar sales= Fixed expenses
CM Ratio
= tk. 2,500,000/0.2222
= tk. 11,245,000
BREAK EVEN POINTS ON GRAPH
Total revenue
Variable cost
2.5m
Fixed Expense
0 1500 Unit sales
To
tal
sa
les
Break even point
WHAT IF ANALYSIS
If we increase sales volume by 1000 units
i.e. 4000units and average sales price
decrease by tk.500 i.e. tk.7000, then the
scenario is:
Profit=Unit CM*Q – Fixed expense
=1667*4000 - 2,500,000
=4,166,667
The average selling price of a of a bicycle is tk.7500
and the average variable expense per bicycle is tk.
5833 . The average fixed expense per year is
tk.2.5m. Using the formula method we determine the
sales dollars that must be generated to attain target
profits of tk.3m per year.
Profit = (Sales – variable expense) – Fixed expenses
3,000,000= Sales – 17,500,000 – 2,500,000
Sales = tk.23,000,000
Per unit sales = 23000,000/3000 Units = tk.7,667
CVP ANALYSIS
NEW PROMOTION
20% DISCOUNT FOR FBS STUDENT
INSTALLMENT PAYMENT SYSTEM FOR STUDENTS
ANY
QUESTION
??