group project on

Activity-Based Costing: Ciron Pharmaceu

by group 7
akanksha rishi 19A1HP047
prayut gawhad 19A1HP050
shivam khare 19A1HP049
rishabh das 19A1HP014
siddharth singh 19A1HP055
ron Pharmaceuticals
 Particulars Paramol Ibupara Acelofen Plus Total
Sales 180000.00 648000.00 720000.00 1548000.00
Material Cost 72000.00 259200.00 288000.00 619200.00
Labor Cost
For Running 24000.00 81000.00 135000.00 240000.00
For Setup time 6550.00 22106.25 36843.75 65500.00
Total Labor Cost 30550.00 103106.25 171843.75 305500.00
Overhead Expenses
Storekeeper's salary 2262.50 7635.94 12726.56 22625.00
Supervisor's salary 4510.00 15221.25 25368.75 45100.00
Quality Control 4500.00 15187.50 25312.50 45000.00
Electricity charges 7775.00 26240.63 43734.38 77750.00
Maintenance Expenses 6531.00 22042.13 36736.88 65310.00
Depreciation 17882.50 60353.44 100589.06 178825.00
Packaging & Transportation 6450.00 21768.75 36281.25 64500.00
Total Overhead Expenses 49911.00 168449.63 280749.38 499110.00

Total Cost 152461.00 530755.88 740593.13 1423810.00

Net Profit 27539.00 117244.13 -20593.13 124190.00

Return on Sales 15.30% 18.09% -2.86% 8.02%

According to the traditional method, all the overhead expenses are allocated b
 Computation of number of dispatches
Particulars Paramol Ibupara Acelofen Plus Total
Tablets per batch 15000.00 12000.00 8000.00 35000.00
Batches sold 20.00 45.00 60.00 125.00
Total tablets sold 300000.00 540000.00 480000.00 1320000.00
Boxes dispatched at a time 300.00 150.00 240.00 690.00
Strips per box 20.00 20.00 10.00 50.00
Tablets per strip 10.00 10.00 10.00 30.00
Tablets dispatched at a time 60000.00 30000.00 24000.00 114000.00
Number of dispatches 5.00 18.00 20.00 43.00
Setup time per batch 5.00 7.00 4.00 16.00
Total setup time 100.00 315.00 240.00 655.00
Run time per batch 8.00 12.00 15.00 35.00
Total Run time 160.00 540.00 900.00 1600.00
Total Labor hours 260.00 855.00 1140.00 2255.00
Machine hours per batch 8.00 15.00 12.00 35.00
Total Machine hours 160.00 675.00 720.00 1555.00

d expenses are allocated based on the labor running cost.

According to the ABC method, 80% of storekeeper's salary is allocated on the basis of material cost and rest on the b
labor hours; quality check expenses on the basis of batches manufactured; packaging & transportation on the basis

Particulars Paramol Ibupara Acelofen Plus Total

Sales 180000.00 648000.00 720000.00 1548000.00
Material Cost 72000.00 259200.00 288000.00 619200.00
Labor Cost
For Setup 10000.00 31500.00 24000.00 65500.00
For Running 24000.00 81000.00 135000.00 240000.00
Total Labor Cost 34000.00 112500.00 159000.00 305500.00
Overhead Expenses
Storekeeper's salary
80% ( Material) 2104.65 7576.74 8418.60 18100.00
20% (Batch-wise) 724.00 1629.00 2172.00 4525.00
Supervisor's salary 5200.00 17100.00 22800.00 45100.00
Quality Control 7200.00 16200.00 21600.00 45000.00
Electricity charges 8000.00 33750.00 36000.00 77750.00
Maintenance Expenses 6720.00 28350.00 30240.00 65310.00
Depreciation 18400.00 77625.00 82800.00 178825.00
Packaging & Transportation 7500.00 27000.00 30000.00 64500.00
Total Overhead Expenses 55848.65 209230.74 234030.60 499110.00

Total Cost 161848.65 580930.74 681030.60 1423810.00

Net Profit 18151.35 67069.26 38969.40 124190.00

Return on Sales 10.08% 10.35% 5.41% 8.02%
terial cost and rest on the basis of batches manufactured. The supervisor's salary is allocated on the basis of total
ransportation on the basis of number of dispatches and the remaining overhead expenses as per machine hours.

Computation of number of dispatches

Particulars Paramol Ibupara Acelofen Plus Total
Tablets per batch 15000.00 12000.00 8000.00 35000.00
Batches manufactured / sold 20.00 45.00 60.00 125.00
Total tablets sold 300000.00 540000.00 480000.00 1320000.00
Boxes dispatched at a time 300.00 150.00 240.00 690.00
Strips per box 20.00 20.00 10.00 50.00
Tablets per strip 10.00 10.00 10.00 30.00
Tablets dispatched at a time 60000.00 30000.00 24000.00 114000.00
Number of dispatches 5.00 18.00 20.00 43.00
Setup time per batch 5.00 7.00 4.00 16.00
Total setup time 100.00 315.00 240.00 655.00
Run time per batch 8.00 12.00 15.00 35.00
Total Run time 160.00 540.00 900.00 1600.00
Total Labor hours 260.00 855.00 1140.00 2255.00
Machine hours per batch 8.00 15.00 12.00 35.00
Total Machine hours 160.00 675.00 720.00 1555.00
he basis of total
machine hours.
 Particulars Paramol Ibupara Acelofen Plus Total
Sales 180000.00 648000.00 720000.00 1548000.00
Material Cost 72000.00 259200.00 288000.00 619200.00
Labor Cost
For Setup 10000.00 31500.00 24000.00 65500.00
For Running 24000.00 81000.00 135000.00 240000.00
Total Labor Cost 34000.00 112500.00 159000.00 305500.00
Overhead Expenses
Storekeeper's salary 2630.81 9470.93 10523.26 22625.00
Supervisor's salary 4510.00 15221.25 25368.75 45100.00
Quality Control 4630.23 19533.76 20836.01 45000.00
Electricity charges 8000.00 33750.00 36000.00 77750.00
Maintenance Expenses 6720.00 28350.00 30240.00 65310.00
Depreciation 18400.00 77625.00 82800.00 178825.00
Packaging & Transportation 6636.66 27998.39 29864.95 64500.00
Total Overhead Expenses 51527.69 211949.33 235632.97 499110.00

Total Cost 157527.69 583649.33 682632.97 1423810.00

Net Profit 22472.31 64350.67 37367.03 124190.00

Return on Sales 12.48% 9.93% 5.19% 8.02%

ng to Sandeep's method, the setup cost is allocated directly based on the setup time and the storekeeper's salary is allocat
 Computation of number of dispatches
Particulars Paramol Ibupara Acelofen Plus Total
Tablets per batch 15000.00 12000.00 8000.00 35000.00
Batches sold 20.00 45.00 60.00 125.00
Total tablets sold 300000.00 540000.00 480000.00 1320000.00
Boxes dispatched at a time 300.00 150.00 240.00 690.00
Strips per box 20.00 20.00 10.00 50.00
Tablets per strip 10.00 10.00 10.00 30.00
Tablets dispatched at a time 60000.00 30000.00 24000.00 114000.00
Number of dispatches 5.00 18.00 20.00 43.00
Setup time per batch 5.00 7.00 4.00 16.00
Total setup time 100.00 315.00 240.00 655.00
Run time per batch 8.00 12.00 15.00 35.00
Total Run time 160.00 540.00 900.00 1600.00
Total Labor hours 260.00 855.00 1140.00 2255.00
Machine hours per batch 8.00 15.00 12.00 35.00
Total Machine hours 160.00 675.00 720.00 1555.00

ekeeper's salary is allocated on the basis of material cost. The supervisor's salary is allocated on the basis of running cost
on the basis of running cost of labor and the remaining overhead expenses as per machine hours.