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M/s Sespi Pvt Ltd, headquartered at Kolkata, started the business of bottling and selling Sparkling Water under the brand name of ‘Sespark Aqua’ from the beginning of 2017-18 with liquid assets worth Rs 40 crores.

The graphs given below give various details of the operations of M/s Sespi Pvt Ltd for the five years from 2017-18 to 2021-22, at the end of every year :

The Total cost of Production in a year = The Total Fixed Cost of Production in the year + The Total Variable Cost of Production in that year

Total Profit in a year = Total Sales Revenue in the year – Total cost of Production in the year

Liquid Assets at the end of a year = Liquid Assets at the beginning of the year + Total Profit in the year

Question

In which year was the total cost per carton of Sespark Aqua water the highest ?
Option: 1
2021-22

Option: 2
2020-21

Option: 3
2019-20

Option: 4
2018-19

Answers (1)

best_answer

Tabulating all the data about M/s Sespi Pvt Ltd given and henceforth calculated, we get :

	2017-18	2018-19	2019-20	2020-21	2021-22
Production of Sespark Aqua (in cartons)	440000/10 = 44000	540000/10 = 54000	600000/10 = 60000	480000/10 = 48000	520000/10 = 52000
Sales of Sespark Aqua (in cartons)	360000/10 = 36000	500000/10 = 50000	480000/10 = 48000	460000/10 = 46000	580000/10 = 58000
Cumulative Unsold Stock of Sespark Aqua (in cartons)	44000 - 36000 = 8000	54000 - 50000 + 8000 = 12000	60000 - 48000 + 12000 = 24000	48000 - 46000 + 24000 = 26000	52000 - 58000 + 26000 = 20000
Total Sales Revenue (Rs crores)	36000*2000 = Rs 7.2 crores	50000*2200 = Rs 11 crores	48000*2400 = Rs 11.52 crores	46000*2600 = Rs 11.96 crores	58000*2200 = Rs 12.76 crores
Fixed Cost of Production (Rs crores)	Rs 4 crores	Rs 3 crores	Rs 2.5 crores	Rs 5 crores	Rs 4 crores
Variable Cost of Production (Rs crores)	Rs 3.5 crores	Rs 5 crores	Rs 5.5 crores	Rs 7 crores	Rs 3.5 crores
Total Cost of Production (Rs crores)	4+3.5 = Rs 7.5 crores	3+5 = Rs 8 crores	2.5+5.5 = Rs 8 crores	5+7 = Rs 12 crores	4+3.5 = Rs 7.5 crores
Total Yearly Profit (Rs crores)	7.2 - 7.5 = Rs 0.3 crore loss	11 - 8 = Rs 3 crore profit	11.52 - 8 = Rs 3.52 crore profit	11.96 - 12 = Rs 0.04 crore loss	12.76 - 7.5 = Rs 5.26 crore profit
Liquid Assets of M/s Sespi Pvt Ltd at the end of the year (Rs crores)	40 - 0.3 = Rs 39.7 crores	39.7 + 3 = Rs 42.7 crores	42.7 + 3.52 = Rs 46.22 crores	46.22 - 0.04 = Rs 46.18 crores	46.18 + 5.26 = Rs 51.44 crores

Hence, the total cost per carton of Sespark Aqua water was the highest in 2020-21 at Rs 12 crores

Posted by

Rakesh

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