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| Corporate practice bd |
Cotton Yarn costing statement for(Rotor+ Spinning Mills LTD).
You have to know the basis before costing of yarn per Kg.as under-
Let,s start with Practical Example
Practical Example. (01) (Try yourself)
The ABC LTD. A 100% export oriented group of company, has operate 90% capacity in single business unit. Estimated daily production is 15,000 kg & Average monthly Production is (15,000kg*30days) = 4,50,000 kgs.
(Step-01): -
To Calculate overhead cost per unit
Variable overhead
Under variable overhead include-(assume)
01. Wages and Allowances (Direct) = Tk.3, 00, 0000.000
02. Indirect Wages (Maintenance) = Tk.9, 50,000.000
03. Gas Bills = Tk.80, 00,000.000
04. Packing Materials = Tk.10, 00,000.000
05. Other Factory Overhead = Tk.35, 00,000.000
Total Variable Overhead (A) = Tk.1, 64, 50,000.000
Fixed overhead cost
Under fixed overhead include-(assume)
01. Salaries & Allowances-Factory Office = Tk.32, 50,000.000
02. Salaries & Allowances-Head office = Tk.10, 50,000.000
03. Financial Expenses = Tk.90, 00,000.000
04. Other administrative Overhead = Tk.15, 50,000.000
05. Selling & Distribution Overhead = Tk.5, 50,000.000
06. Depreciation = Tk.50, 50,000.000
Total Fixed Overhead cost (B) = Tk.2, 04, 50,000.000
Finally, Grant Total Factory overhead (A+B) = 3, 69, 00000.00
Total Factory overhead cost per kg= (3, 69, 00000.000/4,50,000kgs)
=Tk.82 per kg
(Step-02): -
Calculate Raw cotton & Waste cotton cost per kg
Assume- Raw cotton cost per KG =Tk.260.80
Assume- Mixing % of Raw Cotton = (28%)
Actual Raw cotton cost per KG= (28%*260.80) = Tk .73.024
Assume- Add: Normal Loss per kg (13.64%*73.024) = TK.9.96
Finally, Raw cotton cost per KG= (73.024+9.96) = Tk .82.98
Assume-Waste cotton per Kg = Tk .135
Assume- Mixing % of Waste Cotton = (72%)
Actual waste cotton cost per KG= (72%*135) = Tk .97.20
Assume- Add: Normal Loss per kg (31.59%*97.20) = TK.30.70
Finally, waste cotton cost per KG= (97.20+30.70) = Tk .127.90
Finally, Total Cost of Raw Materials: -
Raw cotton cost per KG = Tk.82.98
Waste cotton cost per KG = Tk.127.90
Total Raw Materials cost per KG= (82.98+127.90) = Tk .210.88
Let’s start to finally calculate per kg of finished yearn as under-
Finally, Total Cost of Raw Materials: -
Raw cotton cost per KG = Tk. 82.98
Waste cotton cost per KG = Tk. 127.90
Finally, Total Raw Materials cost per KG= (82.98+127.90) = Tk .210.88
Add: Factory overhead cost per kg = 82
Finally, cost per kg of finished yearn (210.88+82) =292.88
Per LBS (292.88/2.2046) =132.84
Dollar per Kg (292.88/84.50) =$3.46
Let’s start to summarizes cost per kg of finished yearn as per financial loan categories (Deferred/ At sight).
|
Summary |
$/KG |
Tk./Kg |
Tk/LBS |
|
Deferred |
3.46 |
292.88 |
132.84 |
|
Interest (9%) |
0.10 |
8.78 |
3.98 |
|
At Sight |
3.56 |
301.66 |
136.82 |
|
IF VAT Tk.3.00 per kg |
|||
|
Summary |
$/KG |
Tk./Kg |
Tk/LBS |
|
Deferred |
(295.88/84.50)= 3.50 |
(292.88+3)=295.88 |
(295.88/2.2046)=134.21 |
|
Interest (9%) |
(3.50*9%/360*120)= 0.10 |
(0.10*84.50)= 8.45 |
(8.45/2.2046)= 3.83 |
|
At Sight |
(3.50-0.10)= 3.40 |
(295.88-8.45)= 287.43 |
(134.21-3.83)= 130.38 |