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    Classic Pen IIM Rohtak

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    The document contains information about the scores of 7 students in a group. It lists their names and scores. The highest score is 244 and the lowest is 192. It also contains income statements and cost analysis for 4 companies - Blue, Black, Red and Purple. It compares their profitability using traditional and activity based costing methods. The ABC analysis shows significant differences in the profitability results calculated by the two methods.

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    Classic Pen IIM Rohtak

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    HEM BANSAL
    75 views12 pages
    The document contains information about the scores of 7 students in a group. It lists their names and scores. The highest score is 244 and the lowest is 192. It also contains income statements and cost analysis for 4 companies - Blue, Black, Red and Purple. It compares their profitability using traditional and activity based costing methods. The ABC analysis shows significant differences in the profitability results calculated by the two methods.

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    Classic Pen IIM Rohtak

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    The document contains information about the scores of 7 students in a group. It lists their names and scores. The highest score is 244 and the lowest is 192. It also contains income statements and cost analysis for 4 companies - Blue, Black, Red and Purple. It compares their profitability using traditional and activity based costing methods. The ABC analysis shows significant differences in the profitability results calculated by the two methods.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    75 views12 pages

    Classic Pen IIM Rohtak

    Uploaded by

    HEM BANSAL
    The document contains information about the scores of 7 students in a group. It lists their names and scores. The highest score is 244 and the lowest is 192. It also contains income statements and cost analysis for 4 companies - Blue, Black, Red and Purple. It compares their profitability using traditional and activity based costing methods. The ABC analysis shows significant differences in the profitability results calculated by the two methods.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 12

    Group 5

    Margesh Patel 216


    Kajal Patil 192
    Anup Sharma 233
    Navneet 207
    Monica Syal 203
    Sushmita 240
    Vishnu 244
    Exhibit 1 Traditional Income Statement

    Blue Black Red Purple


    Sales 75000.00 60000.00 13950.00 1650.00
    Material Cost 25000.00 20000.00 4680.00 550.00
    Direct Labor 10000.00 8000.00 1800.00 200.00
    Overhaead @ 300% 30000.00 24000.00 5400.00 600.00
    Total Operating Income 10000.00 8000.00 2070.00 300.00

    Return on Sales 13.33% 13.33% 14.84% 18.18%

    0.2 0.2 0.23 0.3


    ment

    Total
    150600.00
    50230.00
    20000.00
    60000.00
    20370.00

    13.53%
    Exhibit 2 Direct Costs and Activity Cost Drivers

    Blue Black Red


    Production sales 50000 40000 9000
    Unit Selling price 1.50 1.50 1.55
    Material-unit costs 0.50 0.50 0.52
    Direct labor hrs/unit 0.02 0.02 0.02
    Machine hours/unit 0.10 0.10 0.10
    Production runs 50.00 50.00 38.00
    Setup time/run 4.00 1.00 6.00
    Total setup time 200.00 50.00 228.00
    Part Administration 1.00 1.00 1.00
    and Activity Cost Drivers

    Purple Total
    1000 100000
    1.65
    0.55
    0.02 2000.00
    0.10 10000.00
    12.00 150.00
    4.00 15.00
    48.00 526.00
    1.00 4.00
    Cost Pool

    Indirect Labour 20,000


    40 % of direct labour 8,000
    28,000
    Computer Systems 10,000
    10,000
    Machinery 8,000
    Maintenance 4,000
    Energy 2,000
    14,000
    Total 52,000
    Cost allocation

    Indirect labour Computer Exp Machine Exp


    Handle Production Run 50% 14,000 80% 8,000
    Setup time 40% 11,200
    Parts Administration 10% 2,800 20% 2,000
    Machine Support 100% 14,000
    Total 28,000 10,000 14,000
    Total Activity Rate
    22,000 150 Production runs 146.67
    11,200 526 setup hours 746.67
    4,800 4 number of hours 1200.00
    14,000 10000 machine hours 1.40
    52,000
    ABC Income Statement

    Blue Black Red Purple


    Production Sales Volume 50,000 40,000 9,000 1,000
    Material Cost 25,000 20,000 4,680 550
    Direct Labour 10,000 8,000 1,800 200
    40% Fringe Benefits 4,000 3,200 720 80
    Overheads
    Machine Support 7,000 5,600 1,260 140
    Prod Run Exp. 7,333 7,333 5,573 1,760
    Set up Exp. 149,333 37,333 170,240 35,840
    Admin Exp 1,200 1,200 1,200 1,200
    Total Overheads 164,867 51,467 178,273 38,940

    Total Cost 58,792 46,398 20,088 4,952


    CPU 1.18 1.16 2.23 4.95
    Sales 75,000 60,000 13,950 1,650
    1.50 1.50 1.55 1.65
    Profit 16,208 13,602 -6,138 -3,302
    Profit/unit 0.32 0.34 -0.68 -3.30
    Profit Margin 21.61% 22.67% -44.00% -200.12%

    Return on Sales BLUE BLACK RED PURPLE


    Traditional 13.33% 13.33% 14.84% 18.18%
    ABC 21.61% 22.67% -44.00% -200.12%

    Blue Black Red Purple


    Original Cost/unit 1.3 1.3 1.32 1.35
    ABC cost/unit 1.17584 1.15995 2.232 4.952
    Total
    100,000
    50,230
    20,000
    8,000

    14,000
    22,000
    392,747
    4,800
    433,547

    130,230

    150,600

    20,370

    13.53%

    TOTAL
    13.53%
    13.53%
    Blue Black Red
    Sales $75,000 $60,000 $13,950
    Material costs $25,000 $20,000 $4,680
    Direct labour $10,000 $8,000 $1,800
    Production Run $7,333 $7,333 $5,573
    Set up $4,259 $1,065 $4,855
    Parts Administration $1,200 $1,200 $1,200
    Support $7,000 $5,600 $1,260
    Direct labour fringe $4,000 $3,200 $720
    Total Overhead $23,792 $18,398 $13,608
    Operating income $16,208 $13,602 ($6,138)
    Return on sales 0.216 0.227 -0.44

    16792
    Purple Total
    $1,650 $150,600
    $550 $50,230
    $200 $20,000
    $1,760 $22,000
    $1,022 $11,200
    $1,200 $4,800
    $140 $14,000
    $80 $8,000
    $4,202 $60,000
    ($3,302) $20,370
    -2.001 0.135

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