Statement Of Cost

Sl. No. Particulars Rupees in Million Rupees in Million

1 Purchase of raw materials

2 Opening Raw Materials 184.08
3 Closing Raw Materials 219.02
4 Raw Material Consumed(1+2)-3 -34.94
5 Direct Labour* 176.92

6 Prime Cost(4+5) 141.98

7 Other Manufacturing Expenses

8 Depriciation 15.8
9 Power & Fuel 122.82
10 Rent 16.6
11 Repairs & Maintainance (Machinery) 61.45
12 Rates & Taxes** 23.64

13 Total manufacturing expenses 240.31

14 Gross Works Cost(7+13) 382.29

15 Opening Work in Progress 78.47

16 Closing Work in Progress 82.17

17 Net change in Work in Progress(15-16) -3.7

18 Net Works Cost(14+17) 378.59

19 Administrative Expenses
20 Insurance 17.95
21 Repairs & Maintainance(Building,others) 31.95
22 Freight 64.93
23 Printing & Stationary 8.36
24 Salary*(294*0.4+36.11+52.16) 206.21
25 Rates & Taxes** 11.82
26 Legal & Professional 76.44
27 Directors' Fee 0.14

28 Total Admistrative Expenses 417.80

29 Cost Of Production(18+28) 796.39

30 Opening Finished Goods 121.26

31 Closing Finished Goods 135.63
32 Net Change in Finished goods(30-31) -14.37

33 Cost Of Goods Sold(29+32) 782.02

34 Selling & Distribution Expenses

35 Advertisement and sales Promotion 36.9
36 Discount 88.95
37 Warranty 41.57
38 Travelling & Conveyance 72.61
39 Communication 16.18
40 Total Selling & Distribution Expenses 256.21
41
42 Cost Of Sales(33+40) 1038.23
 OPERATING CYCLE CALCULATION
2006 ###
Sl.No. ITEMS Rupees in Million
1 Raw Material Conversion Period
(a) Raw Material Consumption 1466.02
###
(b) Raw Material consumption Per Day(a/360) ###
4.1
© Raw Material Inventory 260.66
###

(A) (d) Raw Material Inventory Holding Days(c/b) ###

64

2 Work-In- Progress Conversion Period

(a) Cost Of Production 2255.19
###
(b) Cost Of Production Per Day(a/360) ###
6.3
© Work-In- Progress Inventory 0.68
###

(B) (d) Work-In-Progress Inventory Holding Per Day(c/b) ###

0

3 Finished Goods Conversion Period

(a) Cost Of Goods Sold 2183.81
###
(b) Cost Of Goods Sold Per Day(a/360) ###
6.1
© Finished Goods Inventory 234.23
###

© (d) Finished Goods Inventory Holding Days(c/b) ###

39

4 Collection Period
(a) Credit Sales*** 3,997.72
###
(b) Sales Per Day(a/360) 11.10
###
© Debtors 765.54
###

(D) (d) Debtors Outstanding Days(c/b) ###

69

5 Creditors Defferal period

(a) credit Purchase 461.86
###
(b) Purchase Per Day(a/360) 1.28
###
© Creditors 591.93
###

(E) (d) Creditors Outstanding Days(c/b) 461

###

Note:
*---Direct labour is assumed to be 60%& salary to be 40%
**---rates and Taxes 2/3rd is assumed to be factory &1/3rd to be
office
***----All sales are assumed on credit
SUMMARY OF OPERATING CYCLE CALCULATION
(NUMBER OF DAYS)
Gross Operating Cycle
Number Of Days
1 Inventory Conversion Period 2006

(i) Raw Material(A) 64

(ii) Work-In-Progress(B) 0
(iii) Finished Goods© 39
Total Inventory Conversion period 103

2 Debtor Conversion Period(D) 69

3 Gross Operating Cycle(1+2) 172

4 Payment Defferal Period(E) 461

NET OPERATING CYCLE(3-4) -289