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Harsh Electricals
Harsh Electricals
Harsh Electricals
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© 2019, Management Development Institute Gurgaon and Ivey Business School Foundation
5B19B003
Harsh Electricals: Analyzing Cost In Search of Profit - Instructor Spreadsheet
This spreadsheet supports the product "Harsh Electricals: Analyzing Cost In Search of Profit
-Rahul
Teaching Note"
Pramani and(8B19B003)
Ashutosh Dash
is file may be reproduced, stored in a retrieval system, posted to the Internet, or transmitted in any
ny means without the permission of Ivey Business School Foundation. To order copies or request
o reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London,
ada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com. Our goal is to publish
the highest quality; submit any errata to publishcases@ivey.ca.
Marketing Advertising
General and
CEO salary, office expenses
Administrative
Managerial decision-making
Traceability
Workshop Electricity
Office Electricity
Note: *During off production time, 1,000 unit of electricity per month are allocated to the office and factory, based on the space they occupy; 1 square foot = 0.09
Source: Prepared by the case writers.
Behavioral Inventoriable
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ce they occupy; 1 square foot = 0.09 square metres; ₹ = INR = Indian rupee; US$1 = ₹54.35 on April 1, 2013.
EXHIBIT TN-4: PRODUCT PROFITABILITY ANALYSIS UNDER THE CONVENTIONAL COST SYSTEM (IN ₹)
Particulars Regular
Direct Materials Consumed
Body 650.00
Motor 500.00
Pump 90.00
Blade, Clam, and Wiring 168.00
Pipe, Water Distributor, and Water Panel 190.00
Diverter 110.00
Packing (Carton and Labelling) 40.00
Wheel 30.00
Direct Materials Consumed 1,778.00
Direct Labour
1hr @25/hr;
Labour 25.00
1.2 hrs@25/hr
Direct Expenses
Drilling Bit ₹ 10/unit 10.00
Power 10.00
Prime Cost 1,823.00
Manufacturing Overheads
Supervisor's Salary (Nagesh) 600,000.00
Consumables 45,000.00
Rent (Factory) 100,800.00
Procurement Charges 37,831.00
Depreciation (Factory) 64,000.00
Factory Electricity 71,100.00
Factory Insurance 25,000.00
Indirect Labour 36,000.00
Total Manufacturing Overheads 979,731.00
Production of Standard Model 3,260.00
Production of Baleno Model 810.00
Total Direct Labour Cost 105,800.00
Cost Driver Rate / Overhead Recovery Rate 9.26
Manufacturing Overheads 231.51
Product Cost 2,054.51
Revenue 2,500.00
Profit 445.49
Product Profitability (in %) 0.18
Baleno Model
830.00
630.00
110.00
205.00
210.00
110.00
50.00
40.00
2,185.00
30.00
10.00
15.00
2,240.00
277.81
2,517.81
3,000.00
482.19
0.16
EXHIBIT TN-5: HARSH ELECTRICALS STATEMENT OF COST OF GOODS SOLD (IN ₹)
Note: ₹ = INR = Indian rupee; US$1 = ₹54.35 on April 1, 2013; WIP = work in progress
Note: ₹ = INR = Indian rupee; US$1 = ₹54.35 on April 1, 2013; COGS = cost of goods sold; EBITDA = earnings before interest, taxes, depreciation, and amortization; EBIT = earnings before interest and taxes.
Source: Prepared by the case writers.
T = earnings before interest and taxes.
EXHIBIT TN-7: CALCULATION OF HARSH ELECTRICALS COST-VOLUME-PROFIT ANALYSIS (IN ₹)
Contribution of
Model Sales Mix Contribution
the Bundle
Standard 4.00 577.00 2,308.00
Baleno 1.00 660.00 660.00
Total 2,968.00
Fixed Cost 994,800.00
BEP in bundles Fixed Costs / Contribution 335.18
BEP in units
Standard 335.175 x 4 1,340.70
Baleno 335.175 x 1 335.18
BEP in revenue
Standard 1341 units @ 2500 3,352,500.00
Baleno 335 units @ 3000 1,005,000.00
Total 1676 units 4,357,500.00
Note: ₹ = INR = Indian rupee; US$1 = ₹54.35 on April 1, 2013; BEP = break-even point
EXHIBIT TN-9: HARSH ELECTRICALS SALES REQUIRED FOR THE DESIRED PROFIT
Note: ₹ = INR = Indian rupee; US$1 = ₹54.35 on April 1, 2013; EBIT = earnings before interest and taxes
Source: Prepared by the case writers.