VALUE ADDITION ASSUMPTION ALL OPERATIONS CARRIED OUT IN HOUSE NO TRANSPORTATION COST INVOLVED VN ENG ast COTTON WITH SEED COST Rs. 3200 PER QUINTAL i.e. 100 Kg COST PER Kg Rs. 32 3 Kg COTTON WITH SEED = 1 Kg COTTON WITHOUT SEED COST OF 1 KG GINNED COTTON = 32x3 = Rs. 96 GINNING COST OF GINNING = Rs. 1.5 PER Kg GINNING COST 1.5x3 = Rs. 4.5 PER Kg COST OF COVERSION OF 1Kg OF GINNED COTTON TO 1 Kg ROVING = Rs. 30COST OF CONVERSION OF 1 Kg ROVING INTO 1 Kg YARN = Rs. 60 (30 HANKS OF 30s COUNT IN 1 Kg. Rs. 2 PER HANK SPINNING WAGES) TOTAL COST OF CONVERSION OF 1 KG YARN COST OF GINNED COTTON + GINNING COST + ROVING CONVERSION COST + YARN CONVERSION COST Rs. 96 + 4.5 + 30 + 60 = 190.5 i.e Rs. 190 YARN SELLING COST Rs. 240 PER Kg. PROFIT ON 1 Kg YARN Rs. 240 - 190 = Rs. 50 THIS MEANS PROFIT ON 3 Kg UNGINNED COTTON =Rs. 50 PROFIT ON 1 Kg UNGINNED COTTON = 50/3 = Rs. 16 SALE PRICE OF UNGINNED COTTON 32 + 16 = Rs. 48 COST OF 1 QUINTAL COTTON INCREASE TO 48x100 = Rs. 4800CONVERSION OF YARN TO GREY FABRIC FROM 1 KG YARN IT IS POSSIBLE TO WEAVE 8 METERS OF GREY FABRIC WEAVING CHARGES = Rs. 10 PER METER CHARGES FOR WEAVING 8 METER FABRIC 10x8 = Rs.80 SELLING COST OF GREY FABRIC Rs. 50 PER METER TOTAL COST OF FABRIC 8x50 = Rs 400 PROFIT ON 8 METER FABRIC SELLING COST OF GREY FABRIC - (YARN CONVERSION COST + FABRIC CONVERSION COST) = 400 — (190+80) = Rs. 130 PROFIT ON 3 Kg UNGINNED COTTON = Rs.130 PROFIT ON 1 Kg UNGINNED COTTON = 130/3 = 43. SALE PRICE OF 1Kg COTTON AFTER CONVERSION TO GREY FABRIC 32 + 43 = 75 SALE PRICE OF 1 QUINTAL COTTON 75x100 = 7500