LAB 4
PBT Calculation
The PBT projection for the coming year can be calculated as shown below.
Particulars 
Amount 
Revenue 

Total Bottles Sold 
630,000 
Price Per bottle ($) 
1.59 
Sales Revenue ($) 
1,001,700 
Variable Costs 

Labor ($) 
233,100 
Raw Material ($) 
327,600 
Bottle Hardware ($) 
88,200 
Fixed Costs 

Fixed Production ($) 
75,000 
General & Admin 
115,000 
Advertising 
45,000 
Interest 
41,000 
Depreciation 
47,000 
Total Costs ($) 
971,900 
PBT 
29,800 
Hence the expected PBT as shown above is $29,800.
ROS Calculation
ROS = (PBT/Sales) *100
For the coming year, expected sales = $1,001,700
Expected PBT = $29,800
Hence ROS = (29800/1001700)*100 = 2.975%
LAB 5
 Selling price of a bottle = $1.59
Total fixed cost = (75000+115000+45000+41000+47000) = $323,000
Variable cost per bottle = 0.37+0.52+0.14 = $1.03
Let us assume that the breakeven quantity of bottle be X
Total revenue generated = 1.59X
Total costs (Fixed + Variable) = 323000 + 1.03X
For breakeven, Revenue generated = Total costs
Hence 1.59X = 323000 + 1.03X
Which implies that X= 576,786 bottles
 PBT calculation at full capacity is as shown below.
Particulars 
Amount 
Revenue 

Total Bottles Sold 
650,000 
Price Per bottle ($) 
1.59 
Sales Revenue ($) 
1,033,500 
Variable Costs 

Labor ($) 
240,500 
Raw Material ($) 
338,000 
Bottle Hardware ($) 
91,000 
Fixed Costs 

Fixed Production ($) 
75,000 
General & Admin 
115,000 
Advertising 
45,000 
Interest 
41,000 
Depreciation 
47,000 
Total Costs ($) 
992,500 
PBT ($) 
41,000 
Hence PBT = $41,000 and Sales = $1,033,500
Hence ROS = (41000/1033500)*100 = 3.967%
 Full production capacity = 650,000
Let the selling price per bottle be $X
Total revenue generated at this capacity = 650000X
Total fixed cost = $323,000
Total variable costs = 650000*1.03 = $669,500
Total costs = $992,500
PBT = 650000X – 992,500
Since ROS should be 11%
Hence (650000X – 992,500/ 650000X) = 0.11
Solving the above, we get X= $1.716
 Let the breakeven quantity be X bottles
Total revenues generated = 1.716X
Total fixed cost = (75000+115000+45000+41000+47000) = $323,000
Variable cost per bottle = 0.37+0.52+0.14 = $1.03
Total costs (Fixed + Variable) = 323000 + 1.03X
For breakeven, Revenue generated = Total costs
Hence 1.716X = 323000 + 1.03X
Which implies that X= 470,805 bottles
 Revenue at full production assuming price of $1.59 = $1,033,500
Total fixed cost = $323,000
Let the cost per bottle be $ X
Variable cost per bottle = X+0.52+0.14= 0.66+X
Total costs = 323,000 + (0.66+X)*650000
PBT = 1033500 – 323000 – [(0.66+X)*650000]
Since ROS is 11%, hence
(1033500 – 323000 – [(0.66+X)*650000])/1033500 = 0.11
Solving the above, we X = $0.2582
 6. Assuming the production @630,000 bottles
Let the selling price per bottle be $X
Revenue generated = 630000X
Total Fixed costs = 323,000 + 60,000 = $383,000
New unit variable cost = 1.03 0.15 = $0.88
Total variable costs = 0.88*63000 = $554,400
Total costs = 383000 + 554400 = $937,400
PBT = 630000X – 937400
Since ROS is 11%, hence
(630000X – 937400)/630000X = 0.11
Solving for X, we get X = $1.672
Assuming the production @650,000
Let the selling price per bottle be $X
Revenue generated = 650000X
Total Fixed costs = 323,000 + 60,000 = $383,000
New unit variable cost = 1.03 – 0.15 = $0.88
Total variable costs = 0.88*65000 = $572,000
Total costs = 383000 + 572,000 = $955,000
PBT = 650000X –955,000
Since ROS is 11%, hence
(650000X – 955,000)/650000X = 0.11
Solving for X, we get X = $1.651