# M & M's Lemonades AS - Profit and Capital Balance Calculation

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Question 3.LykkeTil AS produces only one type of product and believes that the relationship between price and volume in the domestic market for this product is:P = 3 600 to 1.2 X (where P is the unit price and X - number of requested devices period).An analysis of costs gave the following relationship between total costs and amount in the relevant interval:TK(total costs) = 600 X + 900 000 (where X is the number of units).Maximum production capacity is 2,500 units in the period.a) gain optimum quantity and price. Calculate the maximum achievable margin and maximumachievable result.Total Cost = 600 x (2500) + 900000 = 2400000Variable Cost = 2400000 – 900000= 1500000Contribution = Sales Price – Variable Cost 3600 – (1500000 / 2500 )3600 – 600= 3000Break Even Point = Fixed Cost / Contribution per unit 900000 / 3000 = 300 unitsMaximum Achievable Margin = 3000 per unitMaximum Achievable Result = 3000 * 2500 = 7500000
b) the quantity and price are demand neutral elastic? Also calculate the maximum turnover (TI).Yes, the Cost-Volume- Price are neutral elasticMaximum turnover = 2500 x 3600 = 9000000c) As an alternative to selling at above market can now sell everything it produces abroad (export) at a fixed price £ 1500, - per unit. What will gain optimal amount by selling in this market, and what is the maximum achievable result? Gain = (1500-600) = 900 per unitMaximum Achievable result = Contribution per unit x Total units sold Less Fixed cost (900 x 2500) – 9000002250000 – 900000 = 1350000Question 4.Mikkel and Maria have 01.11.20X6( november 1`st 2016) started ”M & M`s Lemonades AS” with the following assets (in NOK 1000)AssetsValueVan150 Raw material storage50 Property970 1000 shares of XYZ AS (course(rate) 50/share) 50 PC, Printer, Telephones30 Bank deposits95 Cash5 Machine for production of lemonade500 Total assets1 850 The assets are financed with 60% equity and 40% debt (loan from a local bank)a)Enter the opening balance (IB in Norwegian) for ”M & M`s Lemonades AS” per 01.11.20X6 (1`sto f november 2016)
Opening Balance as on 1-11-2016 = Closing Cash and Cash equivalent + (Assets purchased x 1/60%)5 + (1850 – 5) / 60%Norwegian 3080b)Specify how the following events / vouchers will be posted on the accounts in the financial statement of ”M & M`s Lemonades AS” (the firm is within the toll area and is registered for VAT) Registrations must be done without "draw up" accounts, ie to include date, voucher number, account number and account name, and the amount to be recorded debit (+) or credit (-) in accounts. Start with vouchers 100. Take accounts from a standard account plan.2.11: Inserts ad in the local newspaper, 2 500 nok(norwegian kroner) inclusive of 25% VAT. The local newspaper issues a bill with a maturity date of 15.11.2016.DateParticularsVch noAmount – DrAmount - Cr15-11-2016Advertisement A/c1002000VAT Paid 100250Newspaper vendor A/c 10025005.11: Sells 200 shares of XYZ for nok 60/shareDateParticularsVch noAmount – DrAmount - Cr5-11-2016Bank A/c No xxxx510112000XYZ Shares1011200014.11: Cash recceipt: Various, stationery nok 12 500 inc VATDateParticularsVch noAmount – DrAmount - Cr14-11-2016Stationery Expense 10210000VAT Paid 1022500Cash 10212500

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