Professional Documents
Culture Documents
Marketing Advertising
General and
CEO salary, office expenses
Administrative
Managerial decision-making
Traceability
Workshop Electricity
Office Electricity
During the Season
Office Computer (During Production) 6,000.00
Office Lighting (During the Season) 3,000.00
During Off-Season
During Off-Season (1/8 based on space) 7,500.00
Total 16,500.00
Note: *During off production time, 1,000 unit of electricity per month are allocated to the office and factory, based on the space they occupy; 1 square
Source: Prepared by the case writers.
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the space they occupy; 1 square foot = 0.09 square metres; ₹ = INR = Indian rupee; US$1 = ₹54.35 on April 1, 2013.
PRODUCT PROFITABILITY ANALYSIS UNDER THE CONVENTIONAL COST SYSTEM (IN ₹)
Particulars Regular
Direct Materials Consumed
Body 650.00
Motor 500.00
Pump 90.00
Blade, Clam, and Wiring 168.00
Pipe, Water Distributor, and Water Panel 190.00
Diverter 110.00
Packing (Carton and Labelling) 40.00
Wheel 30.00
Direct Materials Consumed 1,778.00
Direct Labour
1hr @25/hr;
Labour 25.00
1.2 hrs@25/hr
Direct Expenses
Drilling Bit ₹ 10/unit 10.00
Power 10.00
Procurement Charges 0.005 8.89
Prime Cost 1,831.89
Manufacturing Overheads
Supervisor's Salary (Nagesh) 600,000.00
Consumables 45,000.00
Rent (Factory) 100,800.00
Depreciation (Factory) 64,000.00
Factory Electricity 71,100.00
Factory Insurance 25,000.00
Indirect Labour 36,000.00
Total Manufacturing Overheads 941,900.00
Production of Standard Model 3,260.00
Production of Baleno Model 810.00
Total Direct Labour Cost 105,800.00
Cost Driver Rate / Overhead Recovery Rate 8.9026
Manufacturing Overheads 222.57
Product Cost 2,054.46
Revenue 2,500.00
Profit 445.54
Product Profitability (in %) 0.18
Baleno Model
830.00
630.00
110.00
205.00
210.00
110.00
50.00
40.00
2,185.00
30.00
10.00
15.00
10.93
2,250.93
267.08
2,518.00
3,000.00
482.00
0.16
HARSH ELECTRICALS STATEMENT OF COST OF GOODS SOLD (IN ₹)
Note: ₹ = INR = Indian rupee; US$1 = ₹54.35 on April 1, 2013; WIP = work in progress
Source: Prepared by the case writers.
HARSH ELECTRICALS PROJECTED INCOME STATEMENT FOR CALENDAR YEAR 2014 (IN ₹)
Note: ₹ = INR = Indian rupee; US$1 = ₹54.35 on April 1, 2013; COGS = cost of goods sold; EBITDA = earnings before interest, taxes, depreciation, a
Source: Prepared by the case writers.
AR YEAR 2014 (IN ₹)
Classification
Product Cost
Period cost
Period cost
Period cost
Period cost
EBITDA = earnings before interest, taxes, depreciation, and amortization; EBIT = earnings before interest and taxes.
CALCULATION OF HARSH ELECTRICALS COST-VOLUME-PROFIT ANALYSIS (IN ₹)
Contribution of
Model Sales Mix Contribution
the Bundle
Standard 4.00 577.00 2,308.00
Baleno 1.00 660.00 660.00
Total 2,968.00
Fixed Cost 994,800.00
BEP in bundles Fixed Costs / Contribution 335.18
BEP in units
Standard 335.175 x 4 1,341
Baleno 335.175 x 1 335
BEP in revenue
Standard 1341 units @ 2500 3,352,500.00
Baleno 335 units @ 3000 1,005,000.00
Total 1676 units 4,357,500.00
Note: ₹ = INR = Indian rupee; US$1 = ₹54.35 on April 1, 2013; BEP = break-even point
EXHIBIT TN-9: HARSH ELECTRICALS SALES REQUIRED FOR THE DESIRED PROFIT
Note: ₹ = INR = Indian rupee; US$1 = ₹54.35 on April 1, 2013; EBIT = earnings before interest and taxes
Source: Prepared by the case writers.