Last Qtr of 2015 2016

Budgeted Actual
Depreciation - Admin 5,000,000 5,500,000
Electricity - Factory 2,000,000 2,200,000
Rent - Marketing Dept. 500,000 550,000
Indirect Material 750,000 800,000
Indirect Labour 800,000 900,000
Depreciation - Factory 7,500,000 7,000,000
Marketing Expense 5,000,000 5,000,000
Insurance - Factory 1,500,000 1,400,000
Insurance - Admin 500,000 400,000
Insurance - Marketing 1,000,000 800,000
Deprecitaion - Marketing 750,000 800,000
Other Marketing Expense 1,000,000 1,200,000
Other Admin Expense 500,000 600,000
Other Distribution Expense 200,000 300,000
27,450,000
1. Demand in market is 2000 units. The company maintains
15% of demand in inventory
2. Opening Stock 250 units (Finished Goods @ Rs.
65,000/unit

3. Selling Price is Rs/unit 150000

 Absorption

A B Rs
Direct Material 10 KG 5000 50000 Cost For
Direct Labour 5 Hrs 1500 7500 One Unit
Overhead Cost 6,122 Produced
63,622

OH Absorption Rate = Budgeted OH

Budgeted level of activity

Overheads
Budgeted Actual
Electricity - Factory 2,000,000 2,200,000
Indirect Material 750,000 800,000
Indirect Labour 800,000 900,000
Depreciation - Factory 7,500,000 7,000,000

Insurance - Factory 1,500,000 1,400,000

12,550,000 12,300,000

Budgeted Level of production 2000 + 15% of 2000 (300) - 250 (opening Stock)
= 2050

OH Absorption Rate = 6,122

Units Manufactured 2,050

Direct Material 102,500,000
Direct Labour 15,375,000
OH absorbed 12,550,000
CGM 130,425,000
Opening Inventory 16,250,000 146,675,000
Closing inventory 19,131,522 2300 63,772
CGS 127,543,478
Actual Overhead 12,300,000
Over/under Absorbed OH 250,000
CGM (After Subtracting over
absorbed OH) 127,293,478

Sales 300,000,000
COGS 127,293,478
Gross Profit 172,706,522

Other Expenses
Depreciation - Admin 5,500,000
Rent - Marketing Dept. 550,000
Marketing Expense 5,000,000
Insurance - Admin 400,000
Insurance - Marketing 800,000
Deprecitaion - Marketing 800,000
Other Marketing Expense 1,200,000
Other Admin Expense 600,000
Other Distribution Expense 300,000

Total 15,150,000

NPBT 157,556,522
Tax 47,266,957
NPAT 110,289,565
 Marginal

Variable Cost per unit

Direct Material 50,000
Direct Labour 7,500
Variable Overheads -

Budgeted Fixed OH 27,450,000

Budgeted Production 2050

Opening Stock 250

Sold 2000
Production 2050
Closing Stock 300

Variable Selling Expense

Sales 300,000,000

Opening Stock 16250000

Production Cost
Direct Material 102,500,000
Direct Labour 15,375,000
Variable Overheads -
Production Cost 117,875,000
Cost/unit 57,500
Closing Stock 300 134,125,000
Value of Closing Stock 17,494,565 2300 58,315
COGS 116,630,435
Variabe Selling expense -
Total Variable Cost 116,630,435

Contribution Margin 183,369,565

Fixed Cost

Fixed Overhead
Fixed Selling expense
General & Admin
Total Fixed Cost -

Profit 183,369,565