Scribd
Upload
109 views2 pages

SAP Marginal Costing Analysis

The document provides a detailed marginal costing analysis for producing one set of Poori with Masala, breaking down costs into direct material, direct labor, and manufacturing overhead. The total production cost is ₹12.55, with direct labor being the highest cost component at ₹8.34. A selling price of ₹18.83 is calculated, incorporating a 50% markup for profit margin.

Uploaded by

moorthykem
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
109 views2 pages

SAP Marginal Costing Analysis

The document provides a detailed marginal costing analysis for producing one set of Poori with Masala, breaking down costs into direct material, direct labor, and manufacturing overhead. The total production cost is ₹12.55, with direct labor being the highest cost component at ₹8.34. A selling price of ₹18.83 is calculated, incorporating a 50% markup for profit margin.

Uploaded by

moorthykem
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

SAP Marginal Costing Analysis: FOR ONE SET OF Poori with Masala

Cost Breakdown and Accounting Entries


1. Direct Material Costs

Material Quantity Unit Price (₹) Total Cost (₹) Accounting Entry
Wheat Flour 100 grams 0.5 0.5 Dr. Raw Material Inventory
Oil 50 ml 0.2 0.1 Cr. Accounts Payable
Masala Powder 10 grams 1 0.1 Dr. Direct Material Cost
Salt 5 grams 0.05 0.01 Cr. Inventory Control
Total Direct Material Cost - - 0.71 -

2. Direct Labor Costs

Hourly Rate
Labor Activity Time (Minutes) Total Cost (₹) Accounting Entry
(₹)
Dough Preparation 5 50 4.17 Dr. Direct Labor Cost
Shaping Poori 3 50 2.5 Cr. Wage Payable
Frying 2 50 1.67 Dr. Manufacturing Overhead
Total Direct Labor Cost 10 - 8.34 -

3. Manufacturing Overhead

Overhead Component Allocation Basis Rate Total Cost (₹) Accounting Entry
Kitchen Utilities Per Batch 2 2 Dr. Manufacturing Overhead
Equipment Depreciation Per Production 1.5 1.5 Cr. Accumulated Depreciation
/Hour
Total Manufacturing OH - - 3.5 -

4. Total Production Cost

Hourly Rate
Labor Activity Time (Minutes) Total Cost (₹) Accounting Entry
(₹)
Dough Preparation 5 50 4.17 Dr. Direct Labor Cost
Shaping Poori 3 50 2.5 Cr. Wage Payable
Frying 2 50 1.67 Dr. Manufacturing OHd
Total Direct Labor Cost 10 - 8.34 -

3. Manufacturing Overhead

Overhead Component Allocation Basis Rate Total Cost (₹) Accounting Entry
Kitchen Utilities Per Batch 2 2 Dr. Manufacturing Overhead
Equipment Depreciation Per Production Hour 1.5 1.5 Cr. Accumulated Depreciation
Total Manufacturing Overhead - - 3.5 -
4. Total Production Cost

Cost Category Total Cost (₹) Percentage

Direct Material 0.71 5.71%


Direct Labor 8.34 67.10%
Manufacturing Overhead 3.5 27.19%
Total Production Cost per Set 12.55 100%

5. Selling Price Calculation

Component Calculation Amount (₹)


Total Production Cost 12.55 12.55
Markup (50%) 12.55 × 0.50 6.28
Selling Price - 18.83

Accounting Entries Summary

1. Production Process
o Dr. Work in Process Inventory: ₹12.55
o

Cr. Raw Material Inventory: ₹0.71

Cr. Wage Payable: ₹8.34

Cr. Manufacturing Overhead: ₹3.50

o
2. Finished Goods
o Dr. Finished Goods Inventory: ₹18.83

Cr. Work in Process Inventory: ₹12.55

Cr. Profit Margin: ₹6.28

Key Insights

 Direct labor constitutes the highest cost component


 Markup ensures a reasonable profit margin
 Detailed tracking of material, labor, and overhead costs

MOORTHY ESAKKY - +91-73565 46086

You might also like