Oven unit
Oven total
Stove unit
Stove total
total
material
45
20,000 x 45 =900,000
40
25,000 x 40 = 1,00,000
1,90,000
Labour
55
20,000 x 55 = 1,100,000
 50
25,000 x 50 = 1,250,000
2,350,000
Variable OH
24
20,000 x 24 = 480,000
24
25,000 x 24 = 600,000
1,080,000
Total variable cost
45 + 55 + 24 = 124
900k+ 1100k + 480k = 2,480,000
40 + 50 + 24 = 114
1000k + 1250k + 600k = 2,850,000
1900k + 2350k + 1080k = 5,330,000
Depreciation & rent = 800,000 + 550,000 =
1350,000
1350,000/45,000 = 30
20,000 x 30 = 600,000
1350,000/45,000 = 30
25,000 x 30 = 750,000
600k + 750k = 1,350,000
Factory support = 1,170,000
60 % are due to ovens
(0.6 x 1,170,000)/ 20,000 = 35.1
0.6 x 1,170,000 = 702,000
40 % are due to ovens
(0.4 x 1,170,000)/25,000 = 18.72
0.4 x 1,170,000 = 468,000
702k + 468k = 1170,000
Total COGS
Sum of above = 189.1
Sum of above = 3,782,000
Sum of above = 162.72
Sum of above = 4,068,000
Sum of above = 7,850,000
Selling price
350
300
profit
350 – 189.1 = 160.9
300 – 162.72 = 137.28
