Harsh Electricals: This Study Resource Was Shared Via

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HARSH ELECTRICALS
ed
ar
sh
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w
m e
Group 11 :
co rc Abhishek Acharya -03
o. sou
Rishi Hada - 42
Santosh Sah - 45
re
Vinay Thakur - 56
dy
This study source was downloaded by 100000822232736 from CourseHero.com on 04-04-2021 05:06:33 GMT -05:00
COST CLASSIFICATION
Amount Classification based on Classification based on Classification based on Classification based on direct vs
Cost Head Classification based on function
(INR) component behaviour inventoriability indirect
Overhead Manufacturing Fixed Product Indirect

Nagesh's Salary 600,000.00
Factory Rent Expense 100,800.00
a
Overhead Administration Fixed Period Indirect
Office Rent Expense 14,400.00
vi
Raw Material Manufacturing Variable Product Direct
Raw Material Cost (Standard Model) 5,796,280.00
Raw Material Cost (Baleno Model) 1,769,850.00
ed
Raw Material Procurement Variable Product Direct
Freight Cost (Standard Model) 28,981.40
Raw Material Procurement Variable Product Direct
ar
Freight Cost (Baleno Model) 8,849.25
Drilling Bits (Standard Model) 32,600.00
sh
Drilling Bits (Baleno Model) 8,100.00
Labour Manufacturing Variable Product Direct
Casual Labour (Standard Model) 81,500.00
as
Labour Manufacturing Variable Product Direct
Casual Labour (Baleno Model) 24,300.00
w
Setup Labour 36,000.00
Consumables 45,000.00
m e
Power (Standard Model) 32,600.00
Power (Baleno Model) 12,150.00

co rc Raw Material Manufacturing Variable Product Direct
o. sou
Factory Insurance 25,000.00
Factory Power Cost 71,100.00
Office Power Cost 16,500.00
re

Factory Depreciation Expense 64,000.00
dy
Office Depreciation Expense 22,000.00

Overhead Distribution Variable Period Indirect
Distribution Expenses 40,000.00
Power Cost Calculation
Factory
Office
Standard Baleno
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Units consumed in manufacturing 3260 1215 -
ed
Season Maintenance 60 -
ar
Lighting 1800 600
sh
Personal Computer - - 300
Maintenance 60 -
as
Off Season Lighting 600 240
- - 120
w
Personal Computer
m e
Total Power Consumption
co rc
o. sou
Factory Office
63,350.00 9,000.00
Season
re
52,500.00 7,500.00
Off Season
dy
Product Unit Cost Calculation
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Manufacturing Overhead Number of Prime Unit Manufacturing Product Unit
Model Prime Cost Overhead Recovery Rate Units Cost Overhead Cost
ed
ar
Standard 5,971,961.40 725,565.69 3260 1,831.89 222.57 2054.456
sh
8.90
as
Balano 1,823,249.25 216,334.31 810 2,250.93 267.08 2,518.00
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m e
co rc
o. sou
re
dy
Break-even Calculations
Standard Baleno Total
a
Total cost 8830010
vi
TFC 766315.69 228484.31 994800
ed
ar
TVC 5971961.4 1863248.6 7835210
sh
No. of units produced 3260 810
as
Variable cost per unit 1831.89 2300.30691
w
Selling Price 2500 3000
m e
co rc
Contribution 668.11 699.693086 1367.8031
o. sou
Labour cost 81500 24300 105800
re
No. of units to be sold for breakeven 1147 327 1474

dy
Projected EBIT on selling 4000 units
No of units sold 3200 800 4000

Selling Price/unit 2500 3000
a
Labour cost 81500 24300 105800
vi
Revenue 8000000 2400000 10400000
No of goods mfgd 3260 810
ed
Product unit cost 2054.456 2518.004
ar
Cost of goods mfgd 6697527 2039584 8737110.65
sh
Add : Opening inv of FG 0 0 0
as
Goods available for Sale 6697527 2039584 8737110.65
w
Less : Closing inv of FG 0 0 0
m e
COGS 6697527 2039584 8737110.65
Gross Profit co rc 1302473 360416.4 1662889.35

o. sou
Office Depreciation 16947.07 5052.93 22000
SG&A Fixed 23802.93 7097.07 30900
re
Variable 32000 8000 40000

dy
EBIT 1229723 340266.4 1569989.35
Minimum units to be sold to make higher profit than
last year
No of units sold 3018 755 3773

Selling Price/unit 2500 3000
a
Labour cost 81500 24300 105800
vi
Revenue 7545000 2265000 9810000
No of goods mfgd 3260 810
ed
Product unit cost 2054.456 2518.004
Cost of goods mfgd 6697527 2039584 8737110.65
ar
sh
Add : Opening inv of FG 0 0 0
Goods available for Sale 6697527 2039584 8737110.65
as
Less : Closing inv of FG 0 0 0
w
COGS 6697527 2039584 8737110.65
m e
Gross Profit
co rc 847472.9 225416.4 1072889.35
o. sou
Office Depreciation 16947.07 5052.93 22000
SG&A Fixed 23802.93 7097.07 30900
Variable 31995.76 8004.241 40000
re
EBIT 774727.2 205262.2 979989.35

dy
PAT 862390.628

Conclusions
◦ Gross Profit Margin = 24.38%
◦ Operating Margin = 16.05% (better than the industry average)
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◦ Net Income Margin = 12.86%
ed
ar
Minimum no. of coolers required to be sold to break-even = 1147 Std Coolers
sh
and 327 Baleno Coolers
as
w
Minimum no. of coolers required to do better than what Mr. Gupta was
m e
doing in the trading business = (approx.) 3773
co rc
o. sou
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dy
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THANK YOU !
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co rc
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dy
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a

Overhead Manufacturing Fixed Product Indirect

Power (Baleno Model) 12,150.00

Overhead Manufacturing Fixed Product Indirect

Office Depreciation Expense 22,000.00

No. of units to be sold for breakeven 1147 327 1474

No of units sold 3200 800 4000

Gross Profit co rc 1302473 360416.4 1662889.35

Variable 32000 8000 40000

EBIT 1229723 340266.4 1569989.35

No of units sold 3018 755 3773

Cost of goods mfgd 6697527 2039584 8737110.65

Goods available for Sale 6697527 2039584 8737110.65

EBIT 774727.2 205262.2 979989.35

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