Other costs are also reported: administrative and marketing costs: 4.300 €; R&D costs: 2.000 €. For the valorization of inventories, the TAXER uses the FIFO criteria Allocation base for overhead: Preparing phase: cost direct labor Firing phase: time for firing You are required to determine: ‒ Manufacturing full costs (unitary cost) of the products (only for completed batches) ‒ The value of final inventories of direct materials, WiP and finished goods ‒ Gross profit and Net result
EXERCISE 2 – GAMATA COMPANY DATA ON INVENTORIES Direct material Initial Inventories of direct material= 16.000 € Final inventories of direct material= 9.000 € WIP WIPin = 111.000 € and: WIPin (WIL) = 31.000 € WIPin (PEN) = 55.000 € WIPin (DUN) = 25.000 € Finished goods Inventories = 325.000 € and: (WIL) = 75.000 € Unitary cost (WIL) = 7.500 € Final inventories (WIL) = 10 u (PEN) = 165.000 € Unitary cost (PEN) = 11.000 € Final inventories (PEN) = 15 u (DUN) = 85.000 € Unitary (DUN) = 17.000 € Final inventories (DUN) = 5 u OVERHEAD Production unit OVHtot (PROD) = 60.000 € Allocation base= time/plant WIL 55h PEN 35h DUN 30h Ʃba = 120h KP = 60.000/120 = 500 €/h OHWIL = 500 * 55 = 27.500 € OHPEN = 500 * 35 = 17.500 € OHDUN = 500 * 30 = 15.000 € Finishing unit OVHtot (FIN) = 50.000 € Allocation base = direct material WIL 4.000 € PEN 4.500 € DUN 4.000 € Ʃba= 12.500 € KF = 50.000/12.500 = 4 OHWIL = 4 * 4.000 = 16.000 € OHPEN = 4 * 4.500 = 18.000 € OHDUN = 4 * 4.000 = 16.000 € Packaging unit OHtot (PACK) = 90.000 € Allocation base= direct labor WIL 14.000 € PEN 20.000 €
EXERCISE 3 – SANIX OVH PROCESSING UNIT Type of resource Unitary cost Use Cost in the period [€] Supervisors 50 €/h 300 h 15.000 Maintenance technicians 50 €/h 160 h 8.000 Energy 20.000 €/month 20.000 Depreciation 50.000 €/month 50.000 total OVH 93.000 Allocation Base: direct labor 700 [h] * 20 [€/h] = 14.000 [€] Coefficient (K) K = 93.000 / 14.000 = 6,64 Therefore: OH (001) = KL * 250 * 20 = 33.200 [€] OH (002) = KL * 400 * 20 = 53.150 [€] OH (003) = KL * 50 * 20 = 6.650 [€] OVH FINISHING UNIT Type of resource Unitary cost Use Cost in the period [mln] Supervisors 50 €/h 700 h 35.000 Maintenance technicians 50 €/h 40 h 2.000 Energy 8.000 €/month 8.000 Depreciation 18.000 €/month 18.000 total OVH 63.000 Allocation Base: direct labor 4500 [h] * 20 [€/h] = 90.000 [€] Coefficient (K) K = 63.000 / 90.000 = 0,7 Therefore OH (001) = KF * 1500 * 20 = 21.000 [€]
C001 (300 u C) Direct Material Direct Labor OVH TOTAL WIP 10.400 € Preparing 0 € 0 € 0 € 0 € Firing 210 € 250 € 8.640 € 9.100 € 19.500 € A001 (280 u A) Direct Material Direct Labor OVH TOTAL WIP 0 € Preparing 2.600 € 3.500 € 7.840 € 13.940 Firing 140 € 400 € 7.920 € 8460 22.400 B002 (200 u B) Direct Material Direct Labor OVH TOTAL WIP 0 € Preparing 1.800 € 2.000 € 4.480 € 8.280 € Firing 0 € 0 € 0 € 0 € 8.280 € INVENTORIES Raw Material Final inventories = initial inventories + purchase – consumtion Final inventories = 2.400 + 5.000 – (750 + 2.600 + 1.800 + 210 + 120 + 140) = 1.780 € WIP 200 units of vases B (batch B002) Final inventories = 8.280 € Finished goods A: 130 * 80 = 10.400 € B: 80 * 77 = 6.160 € C: 130 *65 = 8.450 € Total value of final inventories (finished goods)= 10.400 + 6.160 + 8.450 = 25.010 € GROSS PROFIT and NET RESULT Net sale: 68.000 € Cost of sale 17.000 + 150*80 + 180*77 + 6.000 + 170*65 = 59.910 € GROSS PROFIT 8.090 € Administrative and marketing cost 4.300 € R&D costs: 2.000 € NET RESULTS