Plant Capacity

Past Year's level of operation

Average unit SP
Total fixed cost
Avg variable unit cost

2000000
1500000
1.2
520000
0.75

Sales at full capacity(units)(A)

Actual sales volume(units)(B)
Unit sales price(C)
Total sales revenue(D=B*C)
Variable cost per unit(E)
Total variable cost(F=B*E)
Fixed Cost(G)
Net profit(H=D-F-G)
Taxes
Dividends
Union bonus
Profit after tax
RE

Agg.
2000000
1500000
1.2
1800000
0.75
1125000
520000
155000
77500
50000
0
77500
27500

Ratios
Variable cost to sales(F/D)
Variable income to sales
Utilization of capacity
Break Even unitwise
Break even revenuewise

0.625
0.375
75.0%
1155556
1386667

A
600000
1.67
1000000
1.25
750000
170000
80000

Current
B

400000
1.5
600000
0.625
250000
275000
75000

500000
0.4
200000
0.25
125000
75000
0

0.75
0.42
0.25
0.58
30.0%
20.0%
408000 314285.7
680000 471428.6

0.625
0.375
25.0%
500000
200000

0.708333

Next Year
B

400000
1.67
668000
1.375
550000
170000
-52000
0

400000
1.5
600000
0.6875
275000
275000
50000
25000

-52000

25000

0.823353
0.176647
20.0%
576271.2
962372.9

Agg

950000 1750000
0.8 1.158857
760000 2028000
0.275 0.620714
261250 1086250
195000
640000
303750
301750
151875
150875
0
0
151875
150875

0.458333 0.34375 0.535626

0.541667 0.65625 0.464374
20.0%
47.5%
87.5%
338461.5 371428.6 1189275
507692.3 297142.9 1378200

Purchase Price(Rs/kg)
Estimated Monthly Expense

12
Cahier's salary
Counter Boys
Rent
Electricity
Misc

Expected average monthly volume(kg)

Expected Operating Cost/kg
SP computation
Purchase
Unit Size (g) Price@12
50
100
250
500
1000

0.6
1.2
3
6
12

600
600
150
400
210
3000
0.653
Operating
Cost@0.653/ Total
kg
cost/unit
0.033
0.708
0.065
1.345
0.163
3.263
0.327
6.447
0.653
12.813

Income statement for April

Revenue
50 g
100 g
250 g
500 g
1000 g

Less: Cost
Purchase Price
Operating expenses
Cahier's salary
Counter Boys
Rent
Electricity
Misc
Packing/container
50 g
100 g
250 g
500 g
1000 g
PBT

4687*0.8
3130*1.5
1640*3.6
1000*7.1
543*14.1

3749.6
4695
5904
7100
7656.3

2000*12

4687*0.075
3130*0.08
1640*0.1
1000*0.12
543*0.16

24000
600
600
150
400
210

1960

351.525
250.4
164
120
86.88

972.805

taxes
PAT

Common Cost
S.No.

Exhibit 3
Mridula Ice-Cream Parlour
Schedule for Price revision
(Based on Proper allocation)
Basis of
Allocation

No.of
is the
orders
cashier)
1 Cashiers salary(ignoring as Frank
Counter boys salary
No.of pieces
2
sold
Rent
Total weight
3
Total weight
4 Electricity
Total weight
5 Misc expenses
Total
(1
to
5)
6
7 Total weight (kgs)
Operating cost/kg.
(6/7) Rs./kg.
8
Rs./piece
9 Operating cost/kg.
Purchase
price/unit
@
Rs.12/kg.

10

11 Containers (estimates)

12 Total cost/unit
110%
of
cost

13

14 Price (nearest 10 p)

Mridula Ice-Cream Parlour

Product Line
Revenues (Rs.)

(gms)
50

Sales Price per piece

Sales (in units)
Revenues (Rs.)

0.80
4,687
3,749.60

Variable cost

Purchase Price @ Rs. 12/kg

Containers Cost/unit
Loss due to melting (5% per unit)

0.600
0.075
0.030
0.705

Total Cost/unit
Contribution/unit
Contribution/kg
Total contribution

Rs.
Rs.

0.095
1.900
445.265

Fixed Costs (Actuals for June)

Counter boy's salary

Rent
Electricity
Misc Expenses

Profit Before Tax

(less) Tax
Profit After Tax

Unit Size (g) No of order total no units Total wt

50
3640
4687
234
100
2200
3130
313
250
720
1640
410
500
340
1000
500
1000
100
543
543
Total
7000
11000
2000

110% of cost Unit SP

0.7788
0.8
1.4795
1.5
3.5893
3.6
7.0917
7.1
14.0943
14.1

Income statement for April(modified)

29104.9

Revenue
50 g
100 g
250 g
500 g
1000 g

Less: Cost
Purchase Price
Operating expenses
Cashier's salary
Counter Boys
Rent
Electricity
Misc

26932.805
2172.095

Packing/container
50 g
100 g
250 g
500 g
1000 g
PBT

4687*0.8
3130*1.5
1640*3.6
1000*7.1
543*14.1

3749.6
4695
5904
7100
7656.3

2000*12

29104.9

24000
0 (Not considering as Frank is cashier
600
150
400
210
1360

4687*0.075
3130*0.08
1640*0.1
1000*0.12
543*0.16

351.525
250.4
164
120
86.88

972.805 26332.81
2772.095

868.838
1303.257

taxes
PAT

Exhibit 3
Mridula Ice-Cream Parlour
Schedule for Price revision
ased on Proper allocation)
50
100
gms.
gms.
Rs.
Rs.

1108.838
1663.257

250
gms.
Rs.

500
gms.
Rs.
-

1000
gms.
Rs.
-

Actual for
June
Rs.

616

263

175

92

56

30

106

141

185

225

245

902

369
234
1.577

316
313
1.010

277
410
0.676

281
500
0.562

275
543
0.506

1518
2,000
0.759

0.079
0.600
0.075
0.754
0.829
0.800

0.101
1.200
0.080
1.381
1.519
1.500

0.169
3.000
0.100
3.269
3.596
3.600

0.281
6.000
0.120
6.401
7.041
7.000

0.506
12.000
0.160
12.666
13.933
13.900

eam Parlour
(gms)

(gms)

(gms)

(gms)

100

250

500

1000

Total

1.50
3,130
4,695.00

3.60
1,640
5,904.00

7.10
1,000
7,100.00

14.10
543
7,656.30

29,104.90

1.200
0.080
0.060
1.340

3.000
0.100
0.150
3.250

6.000
0.120
0.300
6.420

12.000
0.160
0.600
12.760

26,177.22

0.160
1.600
500.8

0.350
1.400
574

0.680
1.360
680

1.340
1.340
727.62

2,927.69
2927.685

600
150
400
210
1,360.00
1,567.69
627.07
940.61

Income statement for April(higher prices)

Revenue
50 g
100 g
250 g
500 g
1000 g

Less: Cost
Purchase Price
Operating expenses
Cashier's salary
Counter Boys
Rent
Electricity
Misc
Packing/container
50 g
100 g
250 g
500 g
1000 g
PBT

4687*0.9
3130*1.6
1640*3.6
1000*7.1
543*14.1

4218.3
5008
5904
7100
7656.3

2000*12
0
600
150
400
210

4687*0.075 351.525
3130*0.08
250.4
1640*0.1
164
1000*0.12
120
543*0.16
86.88

29886.6

24000

1360

972.805 26332.81
3553.795

taxes
PAT

1421.518
2132.277

Sales
Direct Labour
Direct Material
Manufacturing overhead
Machine related
Set up labour
Receiving amd production control
Engg
Packaging and shipping
Total manufacturing overhead

2152500
271250
458000
336000
40000
180000
100000
150000
806000

Gross Margin
GAS
operating income

617250
559650
57600

Valves
Direct Labour
Direct Material
Manufacturing overhead@300%
Std unit cost
target SP
planned GM
Actual SP
Actual GM

10
16
30
56
86.15
35.00%
86
34.88%

Valves
Material per unit
parts@1
parts@2
parts@6
parts@7
parts@8
Material cost per unit
DL per unit
DL $ per unit @ 25/ DL hr
m/c hr per unit

Productions (units)
M/c hrs
Production runs

2.68%

Pumps
Flow controller
12.5
10
20
22
37.5
30
70
62
107.69
95.38
35.00%
35.00%
87
105
19.54%
40.95%

Pumps

4
12

28.68%

Flow controller

4
10

14
16

20

8
22

0.4
10
0.5

0.5
12.5
0.5

0.4
10
0.3

Flow
controller Total
Valves
Pumps
7500
12500
400
20400
3750
6250
1200
11200
10
50
100
160

Number of shipments
Hrs of engg hrs

10
250

70
375

220
625

300
1250

Cost driver
Machine related
Machine hr

Set up labour

Production run

Engg hr

Shipment

Machine hr
Percentage
Activity cost
Units
Cost/unit
Production run
Percentage
Activity cost
Cost/unit

Receiving amd
production control

Production run
Percentage
Activity cost
Cost/unit
Total
Engg
Hr of engg work
Percentage
Activity cost
cost/unit
Packaging and shipping No of shipment
Percentage
Activity cost
cost/unit
Total overhead/unit

Valves
Pumps
Flow controller
3750
6250
1200
33.48%
55.80%
10.71%
112500
187500
36000
7500
12500
4000
15.00
15.00
9.00
10
50
100
6.25%
31.25%
62.50%
2500
12500
25000
0.33
1.00
6.25
10
6.25%
11250
1.5
1.83
250
20.00%
20000
2.67
10
3.33%
5000
0.67

50
31.25%
56250
4.5
5.50
375
30.00%
30000
2.40
70
23.33%
35000
2.80

100
62.50%
112500
28.125
34.38
625
50.00%
50000
12.50
220
73.33%
110000
27.50

20.17

25.70

83.38

Valve
Direct Material
Direct Labour
Overhead
Total CP
SP
Profit/loss per
unit
GM %

Pump

FC

16
10
20.17
46.17
86

20
12.5
25.7
58.2
87

22
10
83.38
115.38
105

39.83
46.31%

28.8
33.10%

-10.38
-9.89%

Total

336000

40000

180000

100000

150000

Mumbai
Income
Variable

Variable Cost

Fixed

Contribution to Mumbai Fixed OH

Sunk Cost
Escapable Fixed Cost
Total Fixed Cost
Contributin to Local Company OH

Poster
EX 3

Paint
EX 4

Commercial
EX 5

355,231
107,621
247,610
96,155
89,651
185,806
61,804

206,261
72,305
133,956
32,344
51,502
83,846
50,110

81,363
54,719
26,644

0.52
185,806
0.17

0.41
83,846
0.24

0.03
2,300
0.30

0.70

0.65

0.33

2,300
2,300
24,344

Mumbai OH
Contribution to Company OH and Profits

Fixed Cost to Sales

Break Even Income
Location Cont./ Sales Ratio
Cont to Sales (P/v Ratio)

Delhi
Income
Variable Cost
Contribution to Delhi Fixed OH
Sunk Cost
Escapable Fixed Cost
Total Fixed Cost

Contributin to Local Company OH

Delhi OH
Contribution to Company OH and Profits

Poster
EX 6

Paint
EX 7

Commercial
EX 8

99,899
40,619
59,280
13,608
15,938
29,546
29,734

23,318
3,867
19,451
4,068
5,518
9,586
9,865

14,516
9,884
4,632

0.30
29,546
0.30
0.59

0.41
9,586
0.42
0.83

0.04
592
0.28
0.32

592
592
4,040

Company OH
Company Profit/Loss
Fixed Cost to Sales
Break Even Income
Location Cont./ Sales Ratio
Cont to Sales (P/v Ratio)

Location Total Company TOTAL

642,855
234,645
408,210
128,499
143,453
271,952
136,258
89,482
46,776

185,806

0.42
271,952
0.21
0.63

137,733
54,370
83,363
(28,993)
112,356
83,363
43,639
31,011
12,628

780,588
289,015
491,573
99,506
255,809
179,897
120,493
59,404
100,061
(40,657)

0.61
83,363
0.32
0.61

0.58