Product Costing

Project workPROJECT REPORTCAPITAL COSTX MachineY Machine@Price of the machine (Basic)1800000.00Excise%16.48296640.000.00CST%483865.60Freight / Insurance%121805.060.00Total2202310.660.00ANCILLARY EQUIPMENTMouldMixerCooling TowerChillerGrinderDryerChain pulley blockOil00OthersTotal00TOTAL MACHINERY COST0.000.00LAND & BUILDINGLand areaRateLand CostShed areaConstruction costBuilding cost00TOTAL CAPITAL COST0.000.00Debt%7500Equity%2500PRODUCTIONPRODUCTWeight of the productRunner weight%100Total Shot weight00No. of pieces per StrokeProduction hours per yearUptime%850.850.85Machine running time per year00Cycle timeProduction per hourQty00Production per hourKg00No. Of Strokes per year00No. of pieces per Year00Rejection%500Rejection in weight00No. of Good pieces per year00WORKING CAPITALRaw Material costStockDays15 days Raw MaterialReceivablesTotal Working CapitalDebt%60Equity%40MEANS OF FINANCELong term Loan00Own Funds00Total Project cost00ANNUAL COSTSRaw Material Reqd per annum00Cost of total raw material00MANUFACTURING COSTConnected load of IMMConnected load of AncillaryConsumption for IMMKwh/Kg0.60.7Power Consumed for IMM00Consumption for Ancillary0.6 Load factor00Total Power consumed/year00Power cost /unitRs5Power cost per year00LABOURSalary for operators(x3)RsSalary for Supervisors(x2)Salary for othersTotal labour cost00Interest per annum%2000Depreciation per annum%2500Administrative expenseMarketing expenseMaintenance expenseTransport/Packing/InsuranceOthersTotal Manufacturing cost00Total annual Cost0.000.00PRODUCT COSTTotal Cost0.000.00Cost /unit00Cost / Kg00PROFIT ANALYSISTotal Annual Cost0.000.00Sales IncomeSales cost/KgGood material produced inKg00Sales00Sale of WastageRejection00Runner00Total Wastage00Selling CostRsIncome from Wastage00Total Income00Gross Profit0.000.00Net Cash Accural0.000.00Gross Profit as % Sale00% Return on Investment00ASSUMPTIONS TO THE ANALYSISCycle time depends on the efficieny of the mold and coolingApprox. price calculated for the ancillary equipmentPower consumption and power factor calculations approximateIndicative costs for land & buildingPower tarrif differs for LT & HTRaw material price at prevailing rate. Regrinding of runners not consideredIMM price is at prevailing rate and leviesThis report is indicative.

&APage &P

hangerCells in yellow are variableCapital investmentUnitsMachine XMachine YBasic Price of the machine1,650,000.001,600,000.00Excise Duty @ 16%16%264,000.00256,000.00Sales Tax @ 4% against form C4%76,560.0074,240.00Insurance @ 0.01%1,990.561,930.24Freight Expenses @ 0.5%9,952.809,651.20Total landed Cost - Machine2,002,503.361,941,821.44Cost of the mold50,000.0050,000.00Total investment cost2,052,503.361,991,821.44Interest on the investment18%369,450.60358,527.86Depreciation (straightline method)20%410,500.67398,364.29Total investment2,832,454.642,748,713.59Variable CostCYCLE TIME:Cycle time of the productsec1111Number of cavitiesnos22Number of days / monthdays2626Number of hours / dayhrs2222Available production hours / monthhrs572572Machine utilization %850.850.85Actual hours of productionhrs486.2486.2Number of cycles / monthnos159120159120Number of pieces producednos318240318240Rejection @ 2%nos63656365Accepted productionnos311875311875MATERIAL:Weight of the productgms1212Runner weightgms22Total shot weightgms1414Total weight produced / monthKgs4455.364455.36Total accepted productionKgs4366.254366.25Cost of the material / kgRs70.0070.00Expenses on raw materialRs311,875.20311,875.20POWER:Power Consumption / kg processedKwh0.80.9Total units consumedKwh3564.294009.82Power cost / unitRs44Power Cost incurredRs14,257.1516,039.30Total Variable CostRs326,132.35327,914.50Fixed CostInvestment cost / monthRs236,037.89229,059.47Wages (2oprs,2sup,1engr)Rs15,000.0015,000.00Land cost or rentRs10,000.0010,000.00Administration ChargesRs3,600.003,600.00Total Fixed CostRs264,637.89257,659.47Total Cost / monthRs590,770.24585,573.96Cost / productRs1.891.88COST BREAK-UPMaterial CostRs1.001.00Power CostRs0.050.05Fixed CostRs0.850.83Rs1.891.88RETURNSelling price of the productRs22Sales ValueRs623,750.00623,750.00Profit / month before taxRs32,979.7638,176.04Profit after tax - PAT (@ 30%)Rs23,085.8326,723.23Cash Flow (PAT + Depreciation)Rs57,294.2259,920.25Pay Back Period (ROI)Years4.123.82

multiple productsPRICE OF MACHINEBasic21000002100000.0016000001600000.00Excise Duty %0.1648346080.000.1648263680.00Sales Tax %0.0497843.200.0474547.20Freight,Insurance & Other %0.0250878.460.0238764.54LANDED COST ( Incl. Modvat)2248721.661713311.74OTHER COSTInterest %0.2449744.330.2342662.35Depreciation %0.2449744.330.2342662.35No. of days available in a year300300No. of hrs per day2020PRODUCTS MFG.Product 1Product 1Time Allocation for Product %11VARIABLE FACTORSCycle time in seconds2022No. of Pieces per stroke11Uptime %0.950.95Weight per piece in gms220220Consistency %0.940.94Rejection %0.020.02Runner Loss %0.080.08Power Consumption Kwu/Kg0.60.8Raw Material Cost per kg5555Re-grinding Cost per kg00Rate per Kw per unit3.53.5Available Capacity in minutes/ yr342000342000No. of strokes per year1026000932727No. of pieces produced per year1026000932727No. of good pieces produced/yr1005480914072Weight of pieces produced in kgs331808301644Weight of good pieces produced in kgs325172295611Input raw material weight in kgs360661327874Weight of raw material for regrinding3548932263in Kgs.Kilo watts consumed during the year216397262299COST PER UNITMaterial ( including re-grinding cost )1788446016258605Electricity757389.5918046.5Interest449744342662Depreciation449744342662TOTAL COST19541337.517861975.5No. of good units produced325172295611Cost per unit60.1060.42Cost per product13.2213.29Cost per unitMaterial ( including re-grinding cost )55.0055.00Electricity2.333.11Interest1.381.16Depreciation1.381.16

&L&D&CProduct Costing between Sigma & Competitor&R&TPage &P

COST ANALYSISPRICE OF MACHINEABBasic1,679,000.001,875,000.00Excise Duty @ 16%268,640.00300,000.00Sales Tax @ 4% C.S.T.77,905.6087,000.00Freight,Insurance & Other @ 0.1% of basic price16,790.0018,750.00LANDED COST ( Incl. Modvat)2,042,335.602,280,750.00OTHER COST(includes mold, building etc)500,000.00500,000.00Interest @ 20% p.a.508,467.12556,150.00Depreciation @ 25% p.a.(Straigt Line Method)635583.90695,187.50PRODUCTION TIMEProduction days available in a year325325Production hours per day2222Yearly Production hours71507150VARIABLE FACTORSCycle time in seconds17.317.3No. of Pieces per stroke11Uptime %8585Weight per piece (gms)6968Consistency %11Rejection %21Runner Loss %11Power Consumption KWh/Kg [ Units per kg. material processed]0.580.44Raw Material Cost - Rs. per kg6060Electicity Cost - Rs. per Unit44Actual yearly production Hours considering Total Uptime6077.56077.5Actual total strokes per year12646821264682Total pieces produced per year12646821264682Good pieces produced/yr cosidering rejection12393881252035Total Weight of pieces produced (Tons) / Input raw material87.2686Weight of good pieces produced (Tons)85.5285.14Weight of rejection material (Tons)1.740.86Weight of material for regrinding - sprue,runner,etc.(Tons)0.860.85Total material for regrinding-rejection plus runner etc.(Tons)2.61.71Total electricity consumed during the year (Units)50611.0037840.00PRODUCTION COSTMaterial Cost5235600.005160000.00Electricity Cost202444.00151360.00Interest508467.00556150.00Depreciation635584.00695188.00TOTAL COST6582095.006562698.00NO. OF GOOD UNITS PRODUCED1239388.001252035.00COST PER UNIT5.315.24BREAK UP OF COST PER UNITMaterial4.224.12Electricity0.160.12Interest0.410.44Depreciation0.510.56Cost per unit5.305.24SALESTotal sales (Assuming sale price per unit Rs.5.75)7107890.187199201.25Profit Before Tax Rs.525795.18636503.25Profit After Tax ( Considering 30% max. Tax )368056.63445552.28Cash Flow : PAT + Depriciation1003640.631140740.28PAY BACK PERIOD ( MONTHS )30.4029.25All Amounts Are in Rs.

&APage &P

shiftrateX machineY MachineZ MahcineXY MachineBasic cost of m/c3100000.003100000.0010000000.0010000000.0012880000.0012880000.00Exise duty in %0.16496000.000.160.000.161600000.000.162060800.00CST in % against C form0.04143840.000.040.000.04464000.000.04597632.00Invoice value3739840.000.0012064000.0015538432.00Transport0.0137398.40120000.00130000.00130000.00Insurance % of basic0.00515500.000.0050.000.00550000.000.00564400.00Modvat claim in % of basic0.000.000.000.000.000.000.000.00Entry tax in % of invoice value0.000.000.020.000.02241280.000.02310768.64Total capital investment3792738.40120000.0012485280.0016043600.64Investment on support equipments150000.00150000.00300000.00300000.00Lease deposit & construction cost for the shed50000.00150000.00150000.00150000.00Expanses on electrical connection50000.00100000.00100000.00100000.00Miscellaneous expanses30000.0050000.0050000.0050000.00Total investment4072738.40570000.0013085280.0016643600.64Monthly running expansesRental charges for shed10000.0010000.0010000.000.00Number of shift operation per day3333Labour charges for 1 shift/month3000.003000.003000.003000.00Supervisory charges per month4000.004000.004000.004000.00Labour & supervisory charges/month13000.0013000.0013000.0013000.00Apprx power consumption/hour in units100.00125.00125.00150.00Power cost per unit3.753.753.753.00Power consumption for 25days60000.0075000.0075000.0090000.00Power cost for 25 days225000.00281250.00281250.00270000.00Other over-heads20000.0020000.0020000.0020000.00Total monthly expanses268000.00324250.00324250.00303000.00Interest charges / month @ 20% p.a20.0067878.979500.00218088.00277393.34Expected capital returns in %0.200.200.200.20Capital returns / month67878.979500.00218088.00277393.34Monthly breakeven403757.95343250.00760426.00857786.69M/C cost per shift (considering 25days/month)5383.444576.6710139.0111437.164500.003000.003000.004500.00Pcs per hour40.0050.0040.0070.0065.00Wt1.350.560.390.260.39Wt per hour54.0028.0015.6018.2025.35Kgs per shift432.00224.00124.80145.60202.80Rs per kg12.4620.0924.0420.6022.19