ESCOLAR STATIONERY

Presented By: Group C2

Nature Of Activity
Located in Udupi. Product oriented. Produces stationery which can be used for office purpose or educational purpose.

Information of the Products

Books

Pens

Pencils

Scope of Activity
Udupi and nearby areas Offices Schools Retail outlets

Departmental Division
Stores Production R&D Distribution

Production/Budgeting
The production procedure is carried out in three different units which consists of heavy machinery. Each unit is allocated for one product .

Budgeting is done every year.

Production Capacity
On the production capacity of each product is Pencils 20,00,000 Pens 15,00,000 Notebooks 1,20,00,000

Floor Layout

PENCIL MAKING PROCESS FLOW DIAGRAM

CLAY GRAPHITE LEAD INSERTED INTO THE WODDEN FRAME

MIXTURE

FINAL FINISHING PAINTING &POLISHING

GRANULES FOSIL STAMPING

CYLINDRICAL BLOCK

DRYING CHAMBER

PACKING

Cost Allotment
Rent General Lighting Wages and Salaries Power Depreciation of Machinery Raw Material Security Insurance Transportation 500000 150000 2000000 1000000 200000 25000000 240000 5000000 2000000

Basis for Cost Allocation

Raw material procurement Production R&D Maintenance Transport Office Packaging Stores & Distribution

Floor Space(sq. ft) Cost of Machinery HP of Machines No. of Employees Hrs worked No.of Machine Hours Lighting points(Nos)

1500

45000

750

750

1800

750

1800

3600

12,00,000 5,00,00,000 4,00,000 90,00,000 1,00,00,000 1,25,000

5,00,000 20,00,000

150

5000

10

150

50

280

100

6 2496

31 7920

15 2496

10 2496

15 7920

7 1920

5 3744

10 2496

3240

8640

3600

900

4320

15

120

10

20

10

10

30

Cost Pool
Overheads Indirect/Direct Variable/Fixed

Rent

Indirect

Fixed

General Lighting
Wages and Salaries Power Depreciation of Machinery Taxes Raw Material Transportation

Indirect
Indirect Indirect Indirect Indirect Direct Indirect

Variable
Fixed Variable Variable Variable Variable Variable

Cost Allocation
Basis Floor Space(sq. ft) Cost of Machinery Raw material Production procurement Maintenance Packaging Storage & Transport Distribution R&D Administra tion

Rent Depreciation Insurance Security Power

13405 2631 65771 3157 26132

402145 109619 2740477 131543 871080

6702 19731 493286 23678 26132

16086 1096 27405 1315 48780

32172 43848 1096191 52617 17422

16086 21924 548095 26309 8711

6702 877 21924 1052 1742

6702 274 6851 329 0

Cost of Machinery
Cost of Machinery HP of Machines

Indirect Wages & Salaries

No. of Employees No. of Employees Lighting points(Nos)

121212

626263

202020

101010

202020

303030

303030

141414

Canteen General Lighting

36364 10090

187879 80717

60606 5381

30303 6726

60606 20179

90909 13453

90909 6726

42424 6726

Cost Apportionment
Storage & Particulars Raw material procurement Production Maintenance Packaging Distribution Transport R&D Administrati on

Transport R&D Administration

40% 10%

35% 20%

25% 10%

40% 20%

60% 10%

20%

10%

Particulars TOTAL Apportionment of R&D Subtotal Apportionment of Transport Subtotal Apportionment of Administration Total

Raw material procurement 1651606

Production 56065696

Maintenance 10110713

Packaging 878556

Storage & Distribution 21813023

Transport 11451855

R&D 1238667

Administra tion 524153

0
1651606 4580741.848 6232348 74879.05059 6307227

433533.3568
56499229 0 56499229 149758.1012 56648987

309666.6834 495466.6934
10420380 0 10420380 1374022 0 1374022

0
21813023 6871112.77 28684136 74879.0505 28759015

0
11451855 -11451855 0

-1238667
0 0 0

0
524153 0 524153 -524153

74879.05059 149758.1012 10495259 1523780

Cost Absorption
Particulars Raw material Production Packaging Maintenance Procurement (no.of machine (no.of machine (no.of machine (no.of machine hrs) hrs) hrs) hrs) 1 3 2 5 4 4 2 2 3 1 1 2

Pencils Pens Notebooks

Particulars Total Overhead cost No.of Machine hours Overhead absorption rate Cost incurred by pencils Cost incurred by pens Cost incurred by notebooks

Raw material Procurement

Production

Maintenance

Packaging

6307227 3240 1946.675 1946.675 5840.025 3893.35

56648987 8640 6556.595 32782.98 26226.38 26226.38

10495259 3240 3239.277 6478.554 6478.554 9717.831

1523780 4320 352.267 352.726 352.726 705.452

Cost of Products
Products
Direct Material 6000000 Overhead costs 41560.93

Total

Pencils

6041561

Pens

11000000

38897.69

11038898

Notebooks

8000000

40543.01

8040543

Joint Products
The production of pencils include the production of lead pencils and colored pencils.
Pencils

They incur some joint cost.

Lead Colored

Final Product

Final Product

Lead
Output 1100000

Colored
150000

Sales
Selling price Separable costs

1095000
3.5 1641561

145000
25 1400000

Lead
Sales Value NRV value Weightage of joint cost Joint cost Joint cost/unit Total cost Total cost /unit 3850000 2208439 0.48 1065840 0.97 2707401 2.46

Colored
3750000 2350000 0.52 1134160 7.56 2534160 16.89

INCOME STATEMENT
Sales Cost of goods sold Gross Profit Gross Profit Margin 3832500 2695094 1137406 29.67% 3625000 2449688 1175312 32.42%

Process Costing
In production of pencils there are mainly two processes: 1. Lead production 2. Sandwich process In the lead production process has 2000 units of O.S WIP @ 1050 D.M and 60% CC values 720.The input into the process is 5000 units @ 0.5 and the CC is Rs. 6050.A output of 6000 units is transferred after a normal loss of 6% of goods and the closing WIP is 50% finished.

Statement of Equivalent Units

Particulars O.S WIP (2000) New goods (4000) C.S WIP (1000) Normal Loss (360) Total E.U Total cost cost/EU Direct Material -- (0%) 4000 (100%) 1000 (100%) 360 (100%) 5360 2500 0.466418 Conversion Cost 800 (40%) 4000 (100%) 500 (50%) 360 (100%) 5660 6050 1.068905

Total cost/unit = 0.466418+1.068905 = 1.535323

Statement of Cost of EU
Opening Stock
DM Prev. Process Prst. Process 1050 720 855.1237 2625.124

New finished goods

Normal Loss

DM CC

1865.672 4275.618 6141.29 552.7161

Closing Stock

DM CC

466.4179 534.4523
1000.87 10320

Total Cost

Activity Based Costing

SNo 1 2 3 4 5 6 ACTIVITY Modifying product characteristics Receiving Raw material Setup of Machine for 3 products Maintenance Production jobs Administration COST DRIVER No.of Man hrs in R&D No.of RM receipts No.of machines No.of Man hrs in Maintenance No.of Machine hrs in production No.of Man hrs in Administration