Rashas Case

Product
Material 1
Exhibit 2 Pain Relief Oil 100
Hair Oil 100
Tooth Power 45

Product
Material 1
Exhibit 2 Pain Relief Oil 220
Hair Oil 360
Tooth Power 110

Raw Material Cost

Product\RM Per Batch

Pain Relief Oil ₹ 34,590.00

Hair Oil ₹ 51,500.00
Tooth Powder ₹ 31,025.00

Oil Expeller
Value/Cost 25000
Exhibit 3
Life (years) 5
Depreciation/Year 5000

Monthly
Rent/month ₹ 15,000.00
Electricity/month ₹ 800.00
Exhibit 4: Overhead Fuel/Transportation ₹ 3,800.00
Cost LPG gas cylinder per unit ₹ 2,500.00
Marketing Expense ₹ 18,000.00
Depreciation of Equipment -
Total Overhead
 Batch Size
Pain Relief 7
Hair Oil 6
Tooth Powder 7

Considering The No. of Days for Batch production as the Activity Driver, POHR is calcula
POHR = Total Overhead / 1456.98
Activity Driver

Bottle cost
Pain Relief Oil 11
Hair Oil 11
Tooth Power 14

Product Per year

OH Cost Calculation Pain Relief Oil ₹ 214,176.15

Hair Oil ₹ 244,772.75
Tooth Powder ₹ 71,392.05

Pain Relief Oil

RM Cost per unit ₹ 45.59
OH Cost per unit ₹ 37.60
Total Production Cost ₹ 83.19
Selling Price ₹ 250.00
Profit ₹ 166.81
Total Profit per year ₹ 1,167,693.85
 Raw material (in KG) Required per batch
Material 2 Material 3
7 7
12 22
2.25 11.25

Cost OF Raw material (Rs/KG)

Material 2 Material 3
1300 70
150 350
1200 800

No. of Batches in 1 year No. of Units/Batch

7 1000
6 1000
7 1000

Oil stove Grinding machine

2400 20000
15 3
160 6667

Yearly Reasons
₹ 180,000.00 15000*12
₹ 9,600.00 800*12
₹ 45,600.00 3800*12
₹ 17,500.00 2500*7 - Gas is ordered 7 times
₹ 216,000.00 18000*12
₹ 61,640.95 Calculated as in Depreciation based on SLM Method
₹ 530,340.95
 No. of days per batch Total no. of days
21 147
28 168
7 49
364

n as the Activity Driver, POHR is calculated as

One unit(bottle) weight in kg Total Units

0.075 7000
0.19 6000
0.19 7000

No. of Batches in 1 year No. of Units/Batch

7 1000
6 1000
7 1000

Hair Oil Tooth Powder

₹ 62.50 ₹ 45.03
₹ 47.80 ₹ 17.20
₹ 110.30 ₹ 62.22
₹ 640.00 ₹ 230.00
₹ 529.70 ₹ 167.78
₹ 3,178,227.25 ₹ 1,174,432.95
h
Material 4 Material 5
6 NA
12 NA
11.25 5

Material 4 Material 5
500 NA
500 NA
700 1300

No. of Units in a year Raw Material Cost for 1 year Raw Material Cost per unit

7000 ₹ 242,130.00 ₹ 34.59

6000 ₹ 309,000.00 ₹ 51.50
7000 ₹ 217,175.00 ₹ 31.03

Sieve Cauldron Label Design Value/Cost

200 12000 48000
2 7 1
100 1714.28571428571 48000

d on SLM Method
 Total weight Kg
525
1140
1330

No. of Units in a year Overhead Cost per unit Lab Testing Cost per batch

7000 ₹ 30.60 ₹ 7,000.00

6000 ₹ 40.80 ₹ 7,000.00
7000 ₹ 10.20 ₹ 7,000.00

₹ 5,520,354.05
 Total Direct
Packaging Cost per unit Material Cost
per unit

₹ 11.00 ₹ 45.59
₹ 11.00 ₹ 62.50
₹ 14.00 ₹ 45.03
 Total
Lab Testing Cost per year Lab Testing OverheadCos
Cost per unit
t per unit
₹ 49,000.00 ₹ 7.00 ₹ 37.60
₹ 42,000.00 ₹ 7.00 ₹ 47.80
₹ 49,000.00 ₹ 7.00 ₹ 17.20
SP
Referral fee

Closing fee
Shipping fees
Pick & Pack fees
Total fees
PRODUCT COST
Total cost
Profit

Returned (6%)

Pain Relief Oil

Crowning Glory Hair Oil
Mouth Spa Tooth Powder
Total

Total Contribution Margin from E-Commerce Option

Items
Pain Relief Oil
Crowning Glory Hair Oil
Mouth Spa Tooth Powder
Total
Wastage cost
Net profit
Pain Relief Oil Hair Oil Tooth Powder
250 640 230 The data is collected from Amazon
3% 4% 3.5%
7.5 25.6 8.05
23 19 24
52 52 52
9 9 9
₹ 91.50 ₹ 105.60 ₹ 93.05
104.93 125.96 90.04
₹ 196.43 ₹ 231.56 ₹ 183.09
₹ 53.57 ₹ 408.44 ₹ 46.91

4%
Items Returned Cost Incurred Actual Units
280 ₹ 55,000.86 7000
240 ₹ 55,574.74 6000
280 ₹ 51,266.22 7000
800 ₹ 161,841.83

No. of units Sold PROFIT

6720 ₹ 359,979.32
5760 ₹ 2,352,606.14
6720 ₹ 315,210.71
₹ 3,027,796.17
₹ 161,841.83
₹ 2,865,954.35
from Amazon
 Additional Expense
Total units produced Units Return Units wasted total cost/unit
Pain Relief Oil 7000 4% 280 ₹ 83.19
Hair Oil 6000 2% 120 ₹ 110.30
Tooth Powder 7000 2.5% 175 ₹ 62.22

Commission to the Parlour agents

Items Units MRP %commission Commission(in Rs)
Pain Relief Oil 6720 ₹ 250.00 12% ₹ 30.00
Hair Oil 5880 ₹ 640.00 18% ₹ 115.20
Tooth Powder 6825 ₹ 230.00 11% ₹ 25.30
 Total Cost
₹ 23,292.25
₹ 13,235.45
₹ 10,889.18
₹ 47,416.88

ur agents
Total cost/unit Profit/unitTotal Profit
₹ 83.19 ₹ 136.81 ₹919,363.20
₹ 110.30 ₹ 414.50 ₹2,437,260.00
₹ 62.22 ₹ 142.48 ₹972,426.00
₹4,329,049.20

Net Profit ₹ 4,329,049.20