Bachelors of Accounting and Finance

PROJECT – 01
Course: Managerial Accounting
Course Code: AF-146

DATE: May 05, 2022 BSAF –04 (FALL)

 Submitted To:
Ma’am BUSHRA KARIM
 Submitted From:
SANA JAVED (200463)
UZAIR QAYYUM (200468)
M. DILL NAWAZ (200458)
 PROJECT

TITLE OF PHASE 02 (SOLAR HEATER)

 Purpose to start-up extension of this product is to retain the customers and give them
vast services at affordable price.

“Move toward the most tranquilize and accessible product”

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Extension to phase 01
 The product that is being displayed is a “Solar Heater”
 The unique value propagation of this product is that it can be charged by using solar
energy from the sun.
 This heater also consists of a battery and solar plates.
 The battery displays the charging of the heater.
 The solar plates help the heater to absorb sunlight so it can be charged. It consists of a
metal body and 3 electrical rods.
 This heater also changes the amount of temperature on its own by doing analysis of the
surrounding. This heater is very useful for people living in village and rural areas because
such areas are facing trouble with the availability of electricity as it does not work on
electricity.
 The capacity of the battery is very good, if the heater has been charged for 3 hours it can
work for about 2 days constantly. 500 units of this product has been produced.

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Table of Contents
Life cycle costing 5
Table representation………………………………………………………………………6
Graphical representation……...………………………………………………………….7
Budgeting 8
Sale budget………………………………………………………………………………..8
Production Budget………………………………………………………...………………8
Direct material budget…………………………………………………………………….9
Direct labor Budget………………………………………………………………………10
FOH Budget……………………………………………………………………………...10
APPENDIX 11

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LIFE CYCLE COSTING

Lifecycle cost can be applied to evaluate the cost of product cost over the life span from
production to disposal like maintenance, disposal, acquisition, designing, testing, and
advertisings. Sometime cost may be incurred after the market life of the product, at this level
profit at the minimum rate per unit .so lifecycle cost ensures that these effects are more
considerable and cost per unit are acceptable.

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Life Cycle Costing (5 years)

Y-1 Y-2 Y-3 Y-4 Y-5 TOTAL

Units
manufactu 10,000 15,000 18,000 20,000 23,000 86,000
red and
sold
R and D 500,000 250,000 - - - 750,000
Cost
Design 100,000 80,000 60,000 55,000 42,000 337,000

Testing 10,000 8000 7500 5000 2000 32,500

Advertising 200,000 100,000 125,000 100,000 80,000 605,000

Disposal 5000 4000 3000 2000 1000 15,000

TOTAL 815,000 402,000 195,500 162,000 125,000 169,9500

Per unit cost: 169, 9500/86,000

= 19.76

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Graphical Representation

Life cycle costing (05 years)

600,000

500,000

400,000

300,000

200,000

100,000

0
R and D cost Design Testing Advertising Disposal

Year 01 Year 02 Year 03 Year 04 Year 05

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BUDGETING
 Sale Budget

ABC Company
Sale Budget
May 05, 2022

Y-1 Y-2
EST.Sale 4000 6000
SP per unit 25 25
Sale revenue 100,000 150,000

 Production Budget

ABC Company
Production Budget
May 05, 2022
Y-1 Y-2
EST.Units 4000 6000 10,000
Add. End inventory 1800(30%) 2000 2000
5,800 8,000 12,000
Less Beg inventory 0 1800 0
5,800 6,200 12,000

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 Direct Material budget

ABC Company
Direct Material budget
May 05, 2022

Y-1 Y-2
Req.Production 5,800 6,200
Material per unit 8 8
Material usage 46,400 kg 49,600 kg

Add. Ending inventory 16, 00 1,800

48,000 51,400
Less. Opening inventory 0 (1600)
48,000 49,800

Cost per unit 10 10

480,000 49, 80,000

 Direct Labor budget

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ABC Company
Direct labor budget
May 05, 2022

Y-1 Y-2
EST production 10,000 15,000
Req labor hrs. 2hrs/units 2hrs/units
Total labor hrs. 20,000 hours 30,000 hours
Labor rate /hours $200 $200
Labor cost 4,000,000 6,000,000

 FOH Budget

ABC Company
FOH budget
May 05, 2022

Y-1 Y-2
Office Supplies 10,000 15,000
Electricity bills 8000 12,000
Depreciation 3,500 3,500
Factory Rent 10,000 10,000
Factory insurance 55, 00 55, 00
37,000 46,000

APPENDIX

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 INTRODUCTION

This project is about to extension of the Phase 01 through different costing procedures
and calculation to address the need for new measures of the research to present, to
evaluate and to demonstrate the metrics and the methods for assuming and comparing
the cost on our product that we have bear till now.

 We have proceed this project with different costing elements;

 Labor Allocation
 Factory overhead
 FOH rate
 Cost per units
 Overhead absorption rate
o OAR Molding
o OAR Finishing
 Life cycle costing
 Budgeting
o Sale budget
o Production budget
o Direct material budget
o Direct labor budget
o FOH budget

 SOURCES
o etsuite.com/portal/resource/articles/accounting/cost-accounting.shtml
o https://www.wallstreetmojo.com/life-cycle-costing/
o https://www.cgma.org/resources/tools/cost-transformation-model/
lifecycle-costing.html

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