RAINSHIELD

VISION:

To make the world waterproof.

MISSION: We strive to provide unique shielding solutions to the users with the
highest level of quality and diversity through customized products.
ABOUT US:
Rainshield is a local company of Manipal whose target is based on providing
various customized and regular umbrellas as per the customers demand. It
was started on 7th of October 2014 by Ankita Raha, Ashish Baruah, Naveen L
and Vrinda Grover who will graduate of T.A.PAI Management Institute 2014-16
batch. We manufacture best quality products of its kind in a lesser price. Door
step delivery is also available on advance orders.
PRODUCT LINE:
UMBRELLA

SizesLarge, Medium, Small

FormatRegular (Male/Female), Customized
Foldable umbrellas no fold, single fold, double fold

FUTURE PLAN:
-

Different types of umbrella

Raincoats of different types

MANUFACTURING PROCESS:

IDENTIFICATION OF COST OBJECTS

Direct cost:
Direct Labour
TYPES OF
LABOUR

NO. OF
LABOURS

WAGE PER
PERSON

TOTAL WAGES

Skilled

5000

15000

Unskilled

3500

7000

total

22000

Direct Materials
RAW MATERIALS

QUANTITY

PRICE/UNIT

TOTAL PRICE

Fabric

1125 m

20

22500

Frames

1250

10

12500

Shafts

1250

6250

Threads

2000 m

0.01

200

Top Rings

1250

2500

Dye

25 l

50

1250

Imprinters

350

700

total

45900

Indirect costs:
Cost Object

Salary per month

CEO

12000

Supply Chain manager

8000

Operation manager

8000

Design Artists

7000

total

35000

Cost Object

Expenses

Factory rent

10000

Distribution

2000

Electricity( fixed, variable)

5000

Maintenance of machines

2500

Shop floor m/c

1000

Employee care

1500

total

22000

Process Timings:
No. Of hours

machine unit/hour

Total

Fabric cutting

0.75

Frame
production

0.75

4.5

Canopy sewing

Tip sewing

0.75

Top rings

0.75

Sew to frame

Fabric setting

1.75

10.5

total

40.0

ALLOCATING COST OF MULTISUPPORT DEPARTMENT

Using reciprocal method

PARTICULARS
DIRECT OVERHEAD
COSTS
ADMINISTRATION
ALLOCATION PERCENTAGE
MAINTENANCE
ALLOCATION PERCENTAGE
DIRECT OVERHEAD
COSTS
ADMINISTRATION COST
ALLOCATION
MAINTENANCE COST
ALLOCATION

TOTAL COST

PRODUCTION
DEPARTMENT
PACKA
FRAME FABRIC
GING
35650

8500

35000

35000

5000

30%

35%

20%

15%

35%

40%

15%

10%

35650
10812.
18273

8500
12614.
21319

35000
7208.1
2182

35000
36040.609
1

3642.1
3199

4162.4
3656

1560.9
1371

1040.6091
4

5000
5406.09
1365
10406.0
914

50104.
31472

25276.
64975

43769.
03553

Calculations
A = 35000 + 0.1 M
M = 5000 + 0.15 A
Where, A= Administration, M= Maintenance
A = 35000 + 0.1 (5000 + 0.15 A)
A = 35000 + 500 + 0.0150 A
A =35500 + 0.0150 A
0.9850 A = 35500
A = 35500/0.9850 = 36040.6091
M = 5000 + 0.15 A
M = 5000 + 0.15 (36040.6091)
M= 5000 + 5406.0914
M = 10406.0914

SUPPORT
DEPARTMENT
ADMINIS
MAINT
TRATION ENANCE

JOB COSTING
Monthly Budgeted cost
Particulars
Overhead Costs
Direct Material
Direct Labor
Labor Hours

Rate per hour

FRAME
9970
18750
8500
320

FABRIC
4950
27150
8500
320

PACKAGI
NG
6250
5000
3500
160

31.15625

15.4687
5

39.0625

Cost incurred in the second week of November

Particulars
Direct Material
Direct Labor
Labor Hours
Particulars:
Overhead Costs Incurred
Overhead Costs Allocated
Under allocated/(Over
allocated)

FRAME

FABRIC

PACKAGI
NG

2890
2000
80

1510
2000
80

1720
1700
40

3010
2492.5

1280
1237.5

1400
1562.5

517.5

42.5

-162.5

ACTIVITY BASED COSTING

Particulars
Direct Material
Direct Labor
Machine Hours
No. of production hours
Quality checking hours

Fabric Dept.
Frame Dept.
15200
12300
5000
4500
114
96
18
15
20
10

Machining Costs
Setup Costs
Quality Check Costs

50000
10000
9000

Rates per unit cost driver

Activity
Machining
Setup
Quality Check

Cost Driver
Machine Hours
Production Hours
Q.C hours

Rate
238.1
303
300

Overhead costs
Machining
Setup
Quality Check
Direct Material
Direct Labor
Total

Fabric Dept.
Frame Dept.
27143.4
22857.6
5454
4545
6000
3000
15200
5000
58797.4

JOINT COSTING

12300
4500
47202.6

Total joint cost = Rs 55,000

PRODUCTIO
N TYPE
Straight &
Low
Double Fold
Single Fold

No. Of
Units
Produced

per unit Sales

Value at split of
point

per unit
separable
costs(Rs.)

per unit
Selling
Price(Rs.)

180
250
300

110
110
90

80
120
100

550
500
480

Physical measure method

Production
Weightage
Joint Cost Allocated
Joint Cost per unit

Straight & Low

180
0.25
13561.64
75.34

Double Fold
250
0.34
18835.62
75.34

Single Fold
300
0.41
22602.74
75.34

Total
730
1
55000

Sales Value at Split off Method

Straight &
Low

Double
Fold

Single
Fold

Total

Sales Value of Total Production at

Split-Off

19800

27500

27000

74300

Weighting

0.27

0.37

Joint Costs Allocated

14656.80

20356.66

0.36
19986.5
4

1.00
55000.
00

NRV Method
Straight &
Low

Double Fold

Single
Fold

Sales Value of Total

Production
Separable costs
Net Realizable Value
Weighting

99000
14400
84600
0.29

125000
30000
95000
0.32

144000
30000
114000
0.39

Joint Costs Allocated

15848.09

17796.32

21355.59

Total
368000
74400
293600
1.00
55000.0
0

Constant Gross-Margin Percentage NRV Method

Sales Value of Total Production
Deduct Separable Costs and Joint Costs
Gross-Margin
Gross-Margin percentage

368000
129400
238600
65

Straight
& Low

Double
Fold

Single
Fold

Total

99000
64189
34811
14400
20411

125000
81046
43954
30000
13954

144000
93365
50635
30000
20635

55000

Final Sales Value of Total

Production
Deduct Gross Margin
Total Production Cost
Deduct Separable Costs
Joint Costs Allocated

PROCESS COSTING
Details of Units at Every Stage
Opening Inventory
Units introduced in the process
units transferred to next stage
Closing inventory

200
600
700
100

Opening Work in Process

Material
Labor
Overhead

Degree Of Completion
100%
40%
40%

Process
Cost
7500
3500
1500

Ending Work in Process

Material
Labor
Overhead

Degree Of Completion
100%
60%
60%

Processing Cost during the Current Period

Process Cost
20000
15000
12000

Material
Labor
Overhead

WAC Method
Calculation of Equivalent Units
Unit
Production
s
Material
Labor
Unit
Unit
%
s
%
s
100
100
Finished and Transferred
700
%
700
%
700
100
Closing Work in progress
100
%
100 60%
60
Total Units
800
800
760

Statement Of Cost
Labo
Material
r
Cost of Opening WIP
7500
3500
1500
Cost incurred in the process
20000
0
1850
Total Costs
27500
0
Equivalent Units
800
760
Cost per unit
34.38
24.34

Overhead
1500

Unit
s

60%

60
760

Total Cost

12000
13500
760
17.76

Statement Of Evaluation
Units
Rate (Rs.)
Value of output transferred
700
76.48
Value of Closing WIP
Materials
100
34.38
Labor
60
24.34
Overheads
60
17.76
Total Cost

Process Account
Total
Cost

Overhead
Unit
%
s
100
%
700

Value
53536
3438
1460.4
1065.6

Unit
s

76.48

Cost
53536

5964
59500

Total
Cost

To Opening WIP
To Material
To Labor
To Overheads
Total

200
700

12500
20000
15000
12000
59500

By Finished Stock
transferred to the
next process
By Closing Stock

700
100

53536
5964
.
59500

FIFO Method
Calculation of Equivalent Units
Unit
Production
s
Material
Labor
Unit
Unit
%
s
%
s
Opening Work In Progress
200
0
0
60% 120
100
100
Finished and Transferred
500
%
500
%
500
100
Closing Work in progress
100
%
100 60%
60
Total Units
800
600
680

Statement Of Cost
Labo
Material
r
Cost of Opening WIP
7500
3500
1500
Cost incurred in the process
20000
0
1850
Total Costs
27500
0
Equivalent Units
600
680
Cost per unit
45.83
27.21

Overhead
1500

Overhead
%
60%
100
%

Units
120

60%

60
680

500

Total Cost

12000
13500
680
19.85

Statement Of Evaluation
Units
Rate (Rs.)
Value of Opening WIP
200
Materials
0
0
Labor
120
27.21
Overheads
120
19.85
Value of output transferred
500
92.89
Value of Closing WIP
Materials
100
45.83
Labor
60
27.21
Overheads
60
19.85

92.89

Value

Cost

0
3265.2
2382
46445

5647
46445

4583
1632.6
1191

7407

Total Cost

Unit
s

To Opening WIP
To Material
To Labor
To Overheads
Total

200
700

59499

Process Account
Total
Cost

12500
20000
15000
12000
59500

By Finished Stock
transferred to the
next process
By Closing Stock

Unit
s

Total
Cost

700
100

52092
7407

59499

INVENTORY COSTING
Price and Cost Details
Opening Inventory
Closing Inventory
Production Units
Sales

Selling Price

Oct-14
0
200
600
400

Nov-14
200
100
650
750

Dec-14
100
150
650
600

380
Variable Costs per unit

Manufacturing
Costs
Direct Material
Direct Labor
Overhead
Packaging Costs for Sold Products

48
31
22
15

Total

116

Fixed Costs (per month)

Manufacturing Costs
Packaging Costs

38000
12000

Variable Costing
Sales
COGS (Variable)

Oct-14
152000

Nov-14
285000

Dec-14
228000

Beginning Inventory
Manufacturing Cost
Ending Inventory
Variable Packaging Cost
Contribution Margin
Fixed Manufacturing Cost
Fixed Packaging Cost
Operating Income

0
60600
20200
6000
105600
38000
12000
55600

20200
65650
10100
11250
198000
38000
12000
148000

10600
65650
15150
9000
157900
38000
12000
107900

Oct-14
152000

Nov-14
285000

Dec-14
228000

0
98950
32866
85916
6000
12000
67916

32866
106815
16433
161752
11250
12000
138502

16433
106815
24650
129402
9000
12000
108402

Oct-14
152000

Nov-14
285000

Dec-14
228000

0
28800
9600
132800
69800
12000
6000
45000

9600
31200
4800
249000
72450
12000
11250
153300

4800
31200
7200
199200
72450
12000
9000
105750

Absorption Costing
Sales
COGS (Fixed+Variable )
Beginning Inventory
Manufacturing Cost
Ending Inventory
Gross Margin
Variable Packaging Cost
Fixed Packaging Cost
Operating Income

Throughput Costing
Sales
COGS (Direct Material )
Beginning Inventory
Manufacturing Cost
Ending Inventory
Throughput Contribution
Manufacturing Cost (non DM)
Fixed Packaging Cost
Variable Packaging Cost
Operating Income