Cost Volume Profit Analysis of Servis Retailer Store

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Cost volume profit analysis of servis retailer store

Subject: Managerial Accounting1                                                                                                                  submitted to: Sir Saeed Ahmed Shaikh                                             Submitted by:                                                                                             Salma kanwal                                                                                                                                                                                                                                                                                                                                                                                                                                                         Shabnam laghari                                                                                                                                               Jan Muhammad sohu                                                                    Class: BBA-6 “C”

Cost volume profit analysis at servis store Military road sukkur

In the early days of summer company has launched its new summer arrivals and every retailer store of the company has to order those new arrivals in their stores. MR: Ashfaque manager of the servis store located at military road sukkur was anxious about the low profitability of the store. Not only this but sales people at store also cry for increasing their salaries. In new summer arrivals Mr.: Ashfaque has seen an opportunity for the business to increase its profits but the issue of sales persons for increasing their salary also pinching in his mind. Currently store is paying eight thousand fix salaries along with 4% of sales to its sales persons. Means if any sales person make sales of 60000 in the month then he will get 8000 fix payment along with the 4% of the sixty thousand in total he will get ten thousand and four hundreds. Mr.: Ashfaque was thinking about raising the sales commission he thought that through this steps sale of the store will increase and also the morale of the employees will increase.

Profile of the store

This store is operated under the name of Servis Company and advertisement of products is done by the company itself. Retailer stores only are the source of distribution for the products. This shop was started in 2011. In the Eid season of year 2012 store has achieved its remarkable sales of amount 1230000 rupees and achieved award for highest sales in the sukkur region. In store for maintaining invoices oracle inventory data base management system has installed cost of installation was paid by the company.  Monthly utility bills expense is about 40000 and rent for the store building is seventy thousands. Monthly salary which manager receives is twenty five thousand rupees while stock boy receive five thousand per month.