Accounting 360 group presentation on behalf of Mr Sheikh Mohammad Rabby.

1. Group-2
Wooden
Hang Shelf

2. Shahariar Hasan Chowdhury
1511346030
03
Tanvir Hasan
1610915630
02
Raktim Das
1611637030
01
Group 2
Azmain Bin Mahabub
1621862630
04

3. Manufacturing Process
Wooden Hang Shelf
Step 1 Step 2 Step 3 Step 4
We will collect our
direct material.
Step 1
Then we will cut the
board into 10 pieces.
Step 2
After cut the board into
pieces 2nd worker will
make hole into each pieces
Step 3
In the end we will attach
the board with rope and
make our finished good.
Step 4

4. Wooden Hang Shelf
ESTIMATIONS

5. Maximum Production
Maximum Production
Direct labor 2
Daily working hour 8
Monthly working days 26
Total labor hour 416
Production hour/ per unit 0.33333333
Maximum Production 1248
In one hour we can produce 3 products. So, to produce
one product we need 0.3333 hour.

6. Manufacturing & NON-Manufacturing Costs
Manufacturing
Direct Material Direct Labor MOH
Wood Board 240
Labor wage 14144
Factory rent 15000
Rope 20
Factory depreciation 70
Hook Screw 2
Total One
unit
262
Factory utility 4000
Production
supervisor salary
10000Total DM
Cost: 326976
Transportation 2000
Total MOH
31070
Total Manufacturing Cost 358046
Indirect Materials Per unit cost Unit Total
Packaging Tk5 1248 packaging unit Tk6240
Total Tk6240
NON Manufacturing
Selling and Administrative Support Cost
Sales-man Salary 7000 Transportation Cost 2000
Showroom equipment depreciation 450 Telephone Bill 700
Showroom rent 25000 Total Support Cost 2700
Sales manager salary 10000
Showroom Utility 4000
Marketing & Advertisement cost 5000
Total Selling Cost 51450

7. Type of Cost
Type of Cost
Cost Detail Cost type
Direct material Direct, Variable
Direct labor Direct, Variable
MOH
Factory depreciation Direct, variable
Factory utility Direct, Mixed
Production supervisor salary Direct, variable
Packaging Indirect, variable
Factory Rent Direct, Fixed
Selling
Shop Rent Fixed, Indirect
Sales man Salary Fixed, Indirect
Manager Salary Fixed, Indirect
Showroom Utility Mixed, Indirect
Showroom Equipment Depreciation Fixed, Indirect
Marketing & advertising Fixed, Indirect
Support Cost
Telephone Bill Variable, Indirect
Transportation Fixed, Indirect

8. Analysis of Cost
Fixed Cost
Item Total (Tk)
Depreciation Factory 70
Indirect labor(production supervisor salary) 10000
Factory Utility 3000
Factory rent 15000
Showroom rent 25000
Showroom Utility 4000
Marketing and Advertisement 5000
Depreciation Showroom 450
Transportation Cost 2000
Manager Salary 10000
Sales man salary 7000
Total 81450
Variable Cost
Item Total (Tk)
Direct Labor 14144
Direct Materials 326976
Factory Utility 3000
Shop Utility 4000
Telephone bill 700
Indirect Materials (packaging) 6240
Total 355060
Mixed Cost
Item Total (Tk)
Factory Utility Tk3000
Shop Utility Tk4000
Total Tk7000

9. Simple Costing System
Total Manu. Cost
(Per Unit)
DM + DL + MOH = 262+11.3322+29.89
= 303.22 BDT
MOH Applied
(Per unit)
POHR * Actual activity of Allocation base of one unit
= 89.68* 0.3333 = 29.89 BDT
POHR
(Pre Determined Overhead Rate)
Total MOH of the upcoming month / Total allocation base of upcoming month
= 37310/416 = 89.68 BDT
Direct Labor Hour per unit * Wage rate
= 0.3333*34 = 11.3322 BDT
Direct Material Cost
(per Unit)
Wood board + Rope +Hook Screw
= 240+20+2 = 262 BDT
Direct Labor Cost
(per Unit)
The cumulative MOH cost of all wooden hang shelf is 300,821 BDT .

10. Cost Strategy of Allocating Support Cost
WOODEN HANG SHELF
SUPPORT COST
Allocated into Manufacturing and Selling Cost.
• Transportation 80% Manu. , 20% Selling.
• Telephone 30% Manu. , 70% Selling.
DIRECT METHOD
• Simple & Straightforward
• Transportation Manu 1600 tk, Selling 400 tk
• Telephone Manu 210 tk, Selling 490 tk.

11. PRIME, CONVERSION & FULL COST
WOODEN HANG SHELF
PRIME COST
CONVERSION COST
FULL COST

12. ACTIVITY BASED COSTING SYSTEM
Activities Cost drivers
Consumption
of cost drivers
Total
Cost
Activity
Rate
Direct material
Number of units
produce
1248 units 326976 262
Direct labor
Number of labor
hours
416 Hrs. 14976 36
Factory Rent Square feet 600Sft. 15000 25
Utility KW use 346 Kw 3000 8.67
Supervision/Shop keeping Total time spent 720 Hrs. 10000 13.89
Depreciation Per product 120 8400 70 BDT
Packaging No. of unit sales 1248 6240 5
Marketing and Advertising
Percentage of
revenue
1248 5000 4.006
Salesperson salary Total time spent 720 Hrs. 7000 9.72
Showroom electricity bill Per KW 461.37 kw 4000 8.67
Telephone bill 1248 700 1.78
UNIT PRODUCT COST
Total cost 42791
Cost per
unit
1248 units 342.87 TK per
unit (Approx.)

13. PRODUCT LINE PROFITABILITY REPORT
Detail Total Total (Tk)
Direct Material per unit Tk262
Direct Labor per unit Tk11.3322
MOH per unit TK 29.89
Product cost per unit TK 303.22
Revenue (Tk450*1248) Tk561600
Less: Cost of goods sold (TK
303.22*1248unit)
Tk378421.30
Gross profit Tk183178.69
Less: Operating expense
(selling & administrative cost +
Support cost) (51450+2700)
Tk54150
Net Income Tk129028.69
Net Income ratio 4.35%
Detail Total (Tk)
Revenue
(450*1248)
Tk 561600
Less: Total cost (TK
342.87 *1248unit)
Tk 427901.76
Net Income Tk 133698.24
Net Income ratio 4.20%
We assume we can sell one unit at 450 BDT. And, we will follow ABC costing
Simple Costing
Activity Costing

14. PRICING
STRATEGY
For pricing strategy we will be using cost plus
approach, here, through this technique, we will
get the selling price of our wooden hang shelf by
adding necessary markup with the cost of the
per unit of our product.
Selling price = Cost base (full cost) + Markup
= Tk342.87 + TK 107.13
=TK 450
Selling Price
Target operating income = Invested capital*rate
of return on invested capital.
= Tk230000 * 0.58% (Tk133698.24/Tk230000)
= Tk133698.24
Target Operating Income
Invested Capital

15. BUDGET
WOODEN HANG SHELF

16. SALES BUDGET
WOODEN HANG SHELF
Total Ending Inventory 1248*10% = 125 Units
Total Budgeted Sales unit {1248 -(1248 *10% )} =
1123 Units
Detail Number of
unit
Price per unit Total revenue
Wooden Hang
Shelf
1123 Tk450 Tk505350
Sales Budget
The unit sales are estimated as 1248 units. We
thought 10 percent of the unit is budgeted sales to
be the planned final stock without a starting stock.

17. PRODUCTION & DIRECT MATERIAL USES BUDGET
WOODEN HANG SHELF
Production Budget Direct Material Uses Budget
Detail Total unit
Sales requirement 1123 unit
(+) Target Ending Finished
Goods
125unit
Total needs of finished goods 1248 unit
(-) Beginning Finished Goods 0 unit
Units need to production = 1248unit
Detail Unit Total
Wood board (1248
unit*1pc)
1248unit
Rope( 1248 unit*1pc) 1248unit
Hook Screw( 1248
unit*1pc)
1248unit
Total Direct materials need
to production
1248unit
Cost:
Tk299520Wood board (1248 unit *TK240)
Rope( 1248 unit*TK20) TK24960
Hook Screw( 1248 unit*TK2) TK2496
Total Tk326976

18. DIRECT MATERIAL PURCHASE & DIRECT MANU. LABOR BUDGET
WOODEN HANG SHELF
Direct Material Purchase Budget Direct Manu. Labor Budget
Detail Product Total
Production needed 1248unit
(+) Targeted Ending
Inventory(DM)
125unit
(-) Beginning
Inventory(DM)
0unit
Actual requirement 1373unit
Cost: Wood board (1373
unit *TK240)
Tk329520
Rope( 1373 unit*TK20) TK27460
Hook Screw( 1373
unit*TK2)
TK2746
Total Tk359726
Product Unit
DLH per
unit
Total
DLHs
Wages
Rate
Total DL cost
Wooden Hang
Shelf
1248 0.33 416 34 Tk14144
Total direct
manufacturing
labor budget
Tk14144

19. MOH COST & MANUFACTURING BUDGET
WOODEN HANG SHELF
 Budget MOH rate = 89.68TK DL per hour
 MOH per Unit = 29.89 TK per unit
Manufacturing Budget
Variable MOH Total (Tk)
Packaging (1248unit*Tk5) Tk6240
Transportation Tk2000
Fixed MOH
Factory rent Tk15,000
Depreciation Tk70
Supervising labors Tk10000
Mixed MOH
Factory electricity Tk4000
Total Tk37310
MOH Cost Budget
Detail
Input per unit of
output
Cost per unit of
input
Total cost
Direct Material
Wood board 1unit Tk240 Tk240
Rope 1unit TK20 TK20
Hook Screw 1unit TK2 TK2
Direct Labor 0.33 DLHS Tk34 per DLH Tk11.3322
MOH 0.33 DLHS TK 89.68 Per DLH TK 29.89
Manufacturing
cost per
Wooden Hang
Shelf
TK 303.22

20. ENDING INVENTORY & COGS BUDGET
WOODEN HANG SHELF
Ending Inventory Budget COGS Budget
Detail Unit
Cost per
unit
Total cost
Ending
finished
goods
125unit
TK
303.22
TK 37903.04
Ending
inventory
budget
TK 37903.04
Detail Total Total
Beginning finished goods 0
(+) Cost of goods manufactured
Direct Material Tk326976
Direct Labors Tk14144
Manufacturing Overhead Tk37310
Total goods available for sale Tk378430
(-) Ending inventory Tk37903.04
Cost of goods sold Tk340526.96

21. BUDGETED INCOME STATEMENT &
BUDGETED CONTRIBUTION FORMAT INCOME STATEMENT
Budgeted Contribution Formal Income StatementBudgeted Income Statement
Detail BDT BDT
Sales Revenues
(1123unit*Tk450)
Tk505350
(-) Cost of goods sold Tk340526.96
Gross Profit Tk164823.04
(-) Operating Expenses
Supportive Cost Tk2700
Selling Cost Tk51450
Total operating cost Tk54150
Net Operating Income Tk110673.04
Detail Total
Sales Revenues (1123unit*Tk450) Tk505350
Variable cost
{1123unit*(Tk355060/1248unit)}
Tk319497.09
Contribution margin Tk185852.91
Fixed cost Tk81450
Net Operating profit Tk104402.91

22. EVALUATIONS
WOODEN HANG SHELF

23. BREAK EVEN ANALYSIS
165 BDT 222136.36 BDT 283415.4 BDT 56.04 %
Contribution margin per unit Margin of safety
Break-Even Sales MOS (in percentage)
492.15 UNIT
Break-Even point in unit
sales and revenue.
COMMENT
The margin of safety of our product is Tk283415.4 and
margin of safety percentage is 56.4% which means that if the
sales of our business declines by 56.4% from budgeted sale,
then we can still reach our Break-even point. So in spite of
being a new product we are optimistic about 'Wooden hang
shelf' since it lies in a good position.
OPERATING LEVERAGE
Operating leverage is high for the Business where
fixed cost is high. The result of operating leverage
= 1.78% times means that if there is 1% changes in
sales and contribution margin will result only
1.78% . So, variable cost affects operating income
rather than fixed costs.

24. Detail BDT BDT
Selling Price (1123unit*Tk450) Tk505350
Less: DM Tk329533.12
DL (Tk11.33*1123unit) Tk14144
MOH
{(Tk37310*1123unit)/1248unit}
Tk33573.02
Non-Manufacturing cost
Support cost Tk2700
Selling cost Tk51450
Total cost Tk431400.14
Net Operating Revenue Tk73949.86
A. 12% Increase in The Prices of
Direct Materials
12% increase in the Direct Material Direct Material
= {(Tk326976*1123unit)/1248unit}*1.12
=Tk329533.12
So, Net operating profit decreases to Tk73949.86,
if direct material cost increases by 12%.
Sensitivity Analysis

25. B. 10% decrease in the demand
of product
10% decrease in the demand of our product
(budgeted sales units) Budgeted sales unit =
{1123unit – (1123unit*.10)
= 1123unit – 112.3unit
= 1010.7unit
So, Net operating profit decreases to
TK25971.98, if our budgeted sales falls by
10%.
Sensitivity Analysis
Detail BDT BDT
Selling Price (1010.7*450) Tk454815
Less: DM Tk326976
DL (Tk11.33*1123unit) Tk14144
MOH
{(Tk37310*1123unit)/1248unit}
Tk33573.02
Non-Manufacturing cost
Support cost Tk2700
Selling cost Tk51450
Total cost TK428843.02
Net Operating Revenue TK25971.98

26. C. 15% increase in the demand
of your product
15% increase in the demand of our product
(budgeted sales units) Budgeted sales unit =
{1123unit + (1123unit*.15)
= 1123unit + 168.45unit
= 1291.54unit
So, Net operating profit increases to
TK152309.48, if our budgeted sales rise by
15%.
Sensitivity Analysis
Detail BDT BDT
Selling Price (1291.45*450) Tk581152.5
Less: DM Tk326976
DL (Tk25*468unit) Tk14144
MOH
{( Tk37310*468unit)/520unit}
Tk33573.02
Non-Manufacturing cost
Support cost Tk2700
Selling cost Tk51450
Total cost TK428843.02
Net Operating Revenue TK152309.48

27. WOODEN HANG SHELF