Professional Documents
Culture Documents
PGDBM-FMG-W13
Notes:
…Good Luck
Rajeev Vishvapriya Ventures Ltd. is embarking upon a new project. The following
information is provided:
A. COST OF PROJECT
Rs. Lacs
2. The company will manufacture products A and B. The installed capacity on this basis
works out to 13800 TPA of A and 9240 TPA of B
3. The company will start commercial production on April 1, 2007. The expected
capacity utilization will be 65% in the first year, 75% in the second year and 85% in
the third year and beyond.
4. The Sales realization per Kg. of A will be Rs. 15.50 and that of B Rs. 16.
For 1 KG of A----Rs.10.00
For 1 KG of B----Rs.9.50
7. Wages are expected to be Rs. 320 lacs, Rs. 360 lacs and Rs.410 lacs for the first,
second and third operating years.
8. Repairs and maintenance will be ½ %, of the total cost of all fixed assets except Land
and Site Development in the first operating year and ¾% in the second and third
years.
9. Other Factory overhead expenses will be Rs. 22.50 lacs for the first year. They will
increase at the rate of 5% per year subsequently.
11. The suppliers of raw materials and consumables will provide trade credit for 1.50
months.
13. Treat year as consisting of 360 days and month of 30 days wherever required.
REQUIRED:
7 Stock-in-process 1.5