Question ID - 53177 | SaraNextGen Top Answer

Read the case let carefully and answer the question that follow The big and colourful company You are running ‘big and colourful (B & C)’ company that sells books to customers through three retail formats. (i). You can buy books from bookstores (ii). You can buy books from supermarket (iii). You can order books over the internet (online) Your manager has an interesting way of classifying expenses. Some of the expenses are classified in terms of size; big, small and medium and others are classified in terms of colours, red yellow, green, violet. The company has a history of categorising overall costs into initial costs and additional costs. Additional costs are equal to the sum of big, small and medium expenses. There are two types of margins, contribution (sales minus initial costs) and profit(contribution minus additional costs). Given below is the data about the sales and costs of B & C. Sales Initial costs Contribution (sales-initial costs) Additional costs Big                                                      9300 Small                                                 3000 Medium                                            3500 60000 39000 21000       15800 Profit (contribution-additional cost ) 5200      Each of big, small and medium cost is categorised by the manager into red, green and violet costs. Breakdown of the additional costs under these headings is shown in the table below Expenses Total Red Yellow Green Violet Big 9300 5100 1200 1400 1600 Small 3000   400 2000 600 Medium 3500 500 1500 1400 200 Total 15800 5500 3100 4800 2400 Red, yellow, green and violet costs are allocated to different retail formats. These costs are apportioned in the ratio of numbers of units consumed by each retail format. The number of units consumed by each format is given in the table below Retail format Red Yellow Green Violet Online 200 50 50 50 Super market 65 20 21 21 Book store 10 30 9 9 Total 275 100 80 80 Read the following statements. I. online store accounted for 50% of the sales at B and C and the ration of super market sales and book store is 12  II. initial cost is allocated in the ratio of sales If you want to calculate the profit/loss from the different retail formats, then (a) statement I alone sufficient to calculate the profit/loss (b) statement II alone sufficient to calculate the profit/loss (c) both statements I and II are required to calculate the profit/loss (d) either of the two statements is sufficient to calculate the profit/loss