Material costing

ABC ANALYSIS

CONTROL SYSTEM

MOBILE

WATCH

PEN

DIVIDE THE MATERIAL INTO THREE CATEGORIES

HUL

1000S

MATERIAL 1 PRODUCT 2 TYPES RAWMATERIAL

1000 ?

2000 TYPES OF RAW MATERIAL

CATEGORY

CATEGORY PRICE / VALUE QTY

A VERY HIGH VERY LESS
B MODERATE MEDIUM MEDIUM
C VERY LOW HIGH

100% - 8 HOURS

CATEGORY PRICE / VALUE QTY

A 70% 10% MAX TIME
B 20% 20% 2ND PREF
C 10% 70% 3RD PREF
A - HIGH IN VALUE AND LOWER IN QTY

B- MODERATE IN BOTH

C– HIGHER IN QTY BUT LOWER IN VALUE

ABC ANALYSIS
INTEGRAL OPERATION

NON INTEGRAL OPERATION

BRANCH – INTEGRAL OR NON INTEGRAL

INTEGRAL – DEPENDANT ON HO – GOODS, CASH - SALES DEPOT. –

FOREIGN EXCHANGE DIFFERNCE - TRANSFER PNL - REGULAR TYPE OF

THINGS – PNL – EXPENSE / INCOME

NON-INTEGRAL – INDEPENDENT – FRANCHISEE – DECISION, GOODS, CASH.

FOREIGN EXCHANGE DIFFERNCE - BALANCE SHEET. – CAPITALISE – LOSS ,

PROFIT
 PPI –

PROFIT PRIOR TO INCORPORATION (REGISTRATION)

CONVERSION

PURCHASE A BUSINES.

STARTED A COMPNAY.

1.1.2020.

REGISTRATION -3 /4 MONTHS-

MOA/ AOA/ DIRECTORS/ PROMOTERS/ CAPITAL

INCORPORATION - 1.4.2020.

1.1.2020 TO 1.4.2020 – PERIOD PRIOR TO INCORPORATION.

1.4. – COMPANY FORMED ON 1ST APRIL 2020.

1ST YEAR –

PNL

1.1.2020- 31.3 APRIL TO DEC

PRE PERIOD POST PERIOD

COMPANY – NOT COMPANY COMPANY

PROFIT

PRE AND POST PERIOD

RATIOS.

TIME RATIO

12 MHTS

1.1.20 TO 31.3.20 PRE 3MTHS

1.4.20TO 31.12.20 POST 9MTHS

3:9.

1:3

Q2.

STARTED BUSINESS ON 1.1.20

CO REGISTERED ON 1.5.20.

TIME RATIO 4:8 (1:2)

PRE PERIOD – JAN TO APRIL – 4 M

POST – APRIL TO DEC – 8 M

Q3.

STARTED BUSINESS ON 1.1.20

CO REGISTERED ON 1.7.20

TIME RATIO?

JAN TO JUNE – 6M

JULY TO DEC – 6 M
Q4.

STARTED BUSINESS ON 1.1.20

CO REGISTERED ON 31.5.20

PRE JAN TO MAY

POST JUNE TO DEC

Q5.

SALES RATIO.

1.1.20 TO 31.3.20 PRE 3MTHS

1.4.20TO 31.12.20 POST 9MTHS

TOTAL SALES – 1000000.

SALES UPTO 31.3. 200000 RS.

PRE – 200000.

POST -800000.

200000:800000.

2:8

1:4

Q6.

1.1.20 TO 31.3.20 PRE 3MTHS

1.4.20TO 31.12.20 POST 9MTHS

TOTAL SALES – 500000.

SALES FROM APRIL TO DEC. 350000 RS.

PRE 150000

POSR 350000

15:35
3:7

Q7.

1.1.20 TO 31.3.20 PRE 3MTHS

1.4.20TO 31.12.20 POST 9MTHS

THE SALES IN POST PERIOD WERE DOUBLE THAN THE PRE PERIOD.

LET THE MONTHLY SALE IN PRE PERIOD BY X

MONTHS PRE POST

JAN X
FEB X
MAR X
AP 2X
M 2X
J 2X
J 2X
A 2X
S 2X
O 2X
N 2X
D 2X

PRE = 3 X

POST = 18X

SALES RATIO

3:18.

1:6..
TIME RATIO AND SALES RATIO

STARTED ON 1.4.2001.

REG ON 1.6.2001.

YEAR END 31.3.2002.

MONTHLY SALES DURING

APRIL TO JULY AVG SALES

AUG TO DEC DOUBLE THE AVG SALES

JAN TO MARCH AVG SALES.

LET THE MONTHLY AVG SALES BE X.

TIME RATIO 2:10.

1.5.
MONTHS PRE POST
AP X
MAY X
JUNE X
J X
A 2X
S 2X
O 2X
N 2X
D 2X
J X
F X
M X
PRE – PERIOD = 2X

POST = 15X

2:15.
STARTED BUSINESS ON 1.1.20

CO REGISTERED ON 31.5.20

YEAR END – 31. DEC

PRE JAN TO MAY

POST JUNE TO DEC

MONTHLY SALES DURING

JAN TO MARCH AVG

APRIL AND MAY THRICE THE AVG

JUNE TO September DOUBLE THE AVG

OCT TO DEC AVG

SOLUTION:

TIME RATIO = JAN TO MAY = PRE = 5M

JUNE TO DEC = POST = 7M

5:7.

MONTHS PRE POST

JAN X
FEB X
MAR X
AP 3X
M 3X
J 2X
J 2X
A 2X
S 2X
O X
N X
D X
9X:11X

SALES RATIO 9:11.

HOME WORK

Q1. STARTED BUSINESS ON 1.1.20

CO REGISTERED ON 1.5.20.

YEAR END – 31.12.20

SALES

JAN TO MARCH AVG

APRIL AND SEPT THRICE THE AVG

OCT TO DEC AVG

CAL SALES RATIO AND TIME RATIO

Q2. STARTED ON 1.4.2001.

REG ON 1.6.2001.

YEAR END 31.3.2002.

SALES

APRIL AND SEPT THRICE THE AVG

OCT TO DEC DOUBLE THE AVG

JAN TO MARCH AVERAGE