Larsen & Toubro Ltd Schedule of Cost of Goods Manufactured for the month of January, 2012

Direct Material Raw Material Inventory, Jan 1 Purchases of Raw Material Raw Material Available for use Raw Material Inventory, Jan 31 Raw Material used Direct Labour Manufacturing Overhead Indirect Material Paint Glue, Gloves Indirect Labour Supervisor salary Overtime paid to DL Production manager salary Other Maintenace of Factory Repairing manufacturing equipments Factory utilities (Water, Gas, Electricity) Factory Rent Depriciation of PPE Factory Insurance Property tax on PPE Factory Accounting & legal services Total Actual manufacturing overhead Deduct: underapplied overhead Add: overhead applied Overhead applied to WIP

70000 25000 95000 35000 60000 54000

5000 7500 5000 1050 8000 7000 250 1500 10000 4000 1000 2000 1500 53800 1300

52500

Total Manufacturing costs Add : WIP in jan 1 Subtotal Deduct: WIP in 31 Jan Cost of goods manufactured

166500 25000 191500 11000 180500

Disposition : When we adjust Underapplied/ overapplied overheads within COGS only

Proration: When we adjust underapplied / overapplied overheads proportionately with WIP, COG Manugactured (Finished G

Normailzed Overhead rate : When we choose to smooth out fluctuations in the predetermined overhead rate by computing t

240000 400000

190000

sum rev

830000 1105000

Underapplied is when Estimated overhead < Actual Overhead Overapplied is when Estimated overhead > Actual Overhead

Manugactured (Finished Good Inventory) & COGS

head rate by computing the overhead rate over a long period (usually in the range of 1, 2 or 3 yrs)

Larsen & Toubro Ltd Schedule of Cost of Goods Manufactured for the month of January, 2012 Finished good inventory Jan 1 Add : Cost of goods manufactured* Cost of goods available for sale Deduct : Finished good inventory, 31 Jan Cost of goods sold Add : underapplied overhead Subtract : over applied Cost of good sold (Including overhead adjustment) 20000 180500 200500 28000 172500 1300 173800

Larsen & Toubro Ltd Schedule of Cost of Goods Manufactured for the month of January, 2012

Sales Revenue Less : COGS Gross Margin SG&A EBIT Interest Expense EBT Tax Expense PAT

225000 173800 51200 17000 34200 34200 10260 23940

Breakeven : in Units Fixed Cost Contribution Margin per unit Fixed Cost Contribution Margin Ratio

in $

Breakeven + Target Profit : Fixed Cost + Target Net Profit in Units Contribution Margin Per Unit in $ Fixed Cost + Target Net Profit Contribution Margin Ratio

Safety Margin In $ Budgeted Sales Revenue - Breakeven Sales Revenue in Units Budgeted Sales Unit - Breakeven Sales unit In % Safety Margin Budgeted Sales