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7 Cost Accounting (Project Format)

The document outlines the cost of production for the project 'Easy Peasy Lemon Squicy,' detailing direct materials, direct labor, and factory overhead, resulting in a total cost of production of Bs 414.94 for 10 jars. The unit production cost is calculated at Bs 41.49, with a sales price of Bs 51.86 and an invoiced sales price of Bs 59.61 after including VAT. Additionally, it presents a fixed cost summary leading to a balance point of 262 jars per month to cover fixed costs of Bs 4,749.25.

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15 views3 pages

7 Cost Accounting (Project Format)

The document outlines the cost of production for the project 'Easy Peasy Lemon Squicy,' detailing direct materials, direct labor, and factory overhead, resulting in a total cost of production of Bs 414.94 for 10 jars. The unit production cost is calculated at Bs 41.49, with a sales price of Bs 51.86 and an invoiced sales price of Bs 59.61 after including VAT. Additionally, it presents a fixed cost summary leading to a balance point of 262 jars per month to cover fixed costs of Bs 4,749.25.

Uploaded by

corejdual065
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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M.Sc.

Jaime Choque Alarcon

PROJECT : EASY PEASY LEMON SQUICY

COST OF PRODUCTION (CP)


Elements of cost
CP = DM + DL + FO

DM = Direct Material; DL = Direct Labour; FO = Factory Overhead

Qp = Quantity produced = 10

DIRECT MATERIAL (DM)


Quantity Unit of measure Description Unit Price (Bs) Amount (Bs)
1 270 gr mabel tripack cookie 7.50 7.50
2 397 gr condensed milk 15.00 30.00
1 lemon of 1 kg lemon 5.00 5.00
4 units egg 1.00 4.00
1 kg white guabira sugar 3.37 3.37
1 820 gr butter regia 30.00 30.00
Total of Direct Material 79.87

DIRECT LABOUR (DL)

No. Persons Position Days worked Salary per day Amount


(Bs)

1 chef 1 130.00 130.00


Total of Direct Labour 130.00

FACTORY OVERHEAD (FO)


Quantity Unit of measure Description Unit Price (Bs) No. Days Amount (Bs)
100% Bs/Month Rent 500 15 33.33
1 Bs/Month Water 60 15 4.00
1 Unit Liguifed gas bottle 22.5 10 2.25
30 Unit Plastic packaging 4 - 120.00
16.71% Bs/Day Social Security 130 1 21.72
8.33% Bs/Day Bonuses 130 1 10.83
8.33% Bs/Day Retirement Benefits 130 1 10.83
Total of Indirect Expenses 202.96
M.Sc. Jaime Choque Alarcon

Depreciation of equipment (Production Area)

Quantity Unit of measure Description Unit Price (Bs) % Depreciation No. Days Amount (Bs)
1 Unit Oven 120.00 12.50% 240 0.06
1 Unit Refrigerator 2,500.00 12.50% 240 1.30
1 Set Kitchen Utensils 200.00 25.00% 240 0.21
1 Unit Gas Bottle(empty) 200.00 25.00% 240 0.21
2 Unit Kitchen Table 400.00 10.00% 240 0.33
Total of Depreciation 2.11

Summary of Factory Overhead

Description Amount (Bs)


Indirect Expenses 202.96
Depreciation of equipment (Production area) 2.11
Total of Factory Overhead 205.07

COST OF PRODUCTION 𝐂𝐏=𝐃𝐌+𝐃𝐋+𝐅𝐎

Description Amount (Bs)


Direct Material 79.87
Direct Labour 130.00
Factory Overhead 205.07
Cost of Production 414.94

𝑼𝑷𝑪=𝑪𝑷/𝑸𝒑
UNIT PRODUCTION COST

Description Amount
Cost of production 414.94
Quantity produced (Number of jars) 10
Unit Production Cost ( Bs per jar ) 41.49

𝑺𝑷=𝑼𝑷𝑪/(𝟏 −% 𝑷𝑴)
SALES PRICE ; PM: Profit margin

Description Amount
Unit production cost (Bs/jar) 41.49
Profit margin (PM) 20%
Unit Sales Price (Bs/jar) 51.86

INVOICED SALES PRICE 𝑰𝑺𝑷=𝑺𝑷 (1 + IVA); IVA = 14,94% Effective rate

Description Amount
Unit Sale price 51.86
IVA Tasa efectiva 14.94%
Unit Invoiced Sales Price (Bs/jar) 59.61
M.Sc. Jaime Choque Alarcon

𝑩𝑷=𝑭𝑪/(𝑼𝑰𝑺𝑷 −𝑼𝑷𝑪)
BALANCE POINT

FIXED COST (MONTHLY)

Quantity Unit of measure Description Unit Price (Bs) Amount (Bs)


100% Bs/Month Rent 1,200.00 1,200.00
1 Bs/Month Electricity 80.00 80.00
1 Set Publicity 125.00 125.00
1 Bs/Month Seller 2,500.00 2,500.00
16.71% Bs/Month Social Security 2,500.00 417.75
8.33% Bs/Month Bonuses 2,500.00 208.25
8.33% Bs/Month Retirement Benefits 2,500.00 208.25
-
Subtotal 4,739.25

Depreciation of furniture (Administration & comercial area)

Quantity Unit of measure Description Unit Price (Bs) % Deprec. No. Months Subtotal
(Bs)
1 Unit Desk 500.00 10.00% 12 4.17
1 Unit Showcase 600.00 10.00% 12 5.00
2 Unit Chair 50.00 10.00% 12 0.83
Total of Depreciation 10.00

SUMMARY OF FIXED COST (FC)

Description Amount (Bs)


Subtotal of fixed cost 4,739.25
Depreciation of furniture 10.00
Total of Fixed Cost 4,749.25

𝑩𝑷=𝑭𝑪/(𝑼𝑰𝑺𝑷 −𝑼𝑷𝑪)
BALANCE POINT

Description Amount
Fixed Cost (FC) 4,749.25
Unit Invoiced Sales Price (UISP) 59.61
Unit Production Cost (UPC) 41.49
Balance point (jars/month) 262

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