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Costing & Profitability: Magiclite Building Solutions

MagicLite Building Solutions is a leading manufacturer of lightweight concrete blocks in India with two manufacturing plants. It was founded in 2008 by alumni of top technical institutes. The document presents a cost sheet analysis for MagicLite's production in December 2019. It details the variable costs including raw materials, manufacturing costs, personnel costs totaling Rs. 1,648 per unit. Fixed costs including administration, G&A costs total Rs. 461 per unit. The contribution per unit is Rs. 767 and the break-even point in units is 10,759 with a break-even sales value of Rs. 25,983,022. The profit volume ratio is 31.76%.

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66 views16 pages

Costing & Profitability: Magiclite Building Solutions

MagicLite Building Solutions is a leading manufacturer of lightweight concrete blocks in India with two manufacturing plants. It was founded in 2008 by alumni of top technical institutes. The document presents a cost sheet analysis for MagicLite's production in December 2019. It details the variable costs including raw materials, manufacturing costs, personnel costs totaling Rs. 1,648 per unit. Fixed costs including administration, G&A costs total Rs. 461 per unit. The contribution per unit is Rs. 767 and the break-even point in units is 10,759 with a break-even sales value of Rs. 25,983,022. The profit volume ratio is 31.76%.

Uploaded by

Prince Arora
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Costing &

Profitability
MAGICLITE BUILDING
S O LU T I O N S

P R E S E N T E D BY: N E H A | N I D H I | S H R U T I A | S H R U T I J
MagicLite Building Solutions is India's frontline
manufacturer of Lightweight concrete (AAC) blocks, a
technology that has turned over a new leaf in the
construction industry. A pioneer in green building
materials with two manufacturing units in Gujarat and
About Haryana covering the strategic markets of west and

Company north India, respectively. 

MagicLite was founded in 2008 by Alumni of some of


the most prominent technical institutes in India
including IIT Delhi, IIT Kharagpur, and IIM Lucknow.
With 800,000 CBM per annum production capacity and
nationwide presence in AAC Fly Ash Blocks Market. 

Costing & Profitability


Top Key
management management
Board of Directors:

1. Sourabh Bansal (B.Tech, M.Tech, 1. Siddharth Sharma (B.Tech, IIT-

Kharagpur)
IIT- Kharagpur)

2. Puneet Mittal (C.A, C.S, C.W.A) 2. Atul Jhunjhunwala (B.Tech - E&C)

3. Sidharth Bansal (B.Tech, IIT-Delhi 3. Kishan Mehrotra (B.E. (Hons.), BITS-

PGDM, IIM-Lucknow) Pilani)

Costing & Profitability


Account Department
Sr.
Manager
Accounts

Asst. Asst. Asst.


Manager Manager Manager
Accounts-1 Accounts-2 Accounts-3

Accounts Accounts Accounts Accounts Accounts Accounts


Executive Executive Executive Executive Executive Executive

Costing & Profitability


Terms associated with costing

Direct &
Variable
Fixed Cost Total Cost Indirect
Cost
Cost

Incrementa Opportunit
Sunk Cost
l Cost y Cost

Costing & Profitability


Types of Costing
Marginal Costing: Through this method only the variable cost is
allocated i.e. direct materials, direct expenses, direct labour and
variable overheads to production. It does not include the fixed cost of
production.

Absorption Costing: It is the technique to absorb the fixed and


variable costs to production. In this method, full costs i.e. fixed and
variable costs are absorbed to the production.

Standard Costing: When the costs are predetermined on certain


standards in each set of operating conditions, it is called standard
costing.

Costing & Profitability


Types of Costing
Historical Costing: In this method the costs are determined in terms of actual costs and
not predetermined standard costs. Costs are determined only after it is incurred. Almost all
organizations adopt this method of costing.

Uniform Costing: It is not a distinct method of costing. It is the adoption of identical


costing principles and procedures by several units of the same industry or several
undertakings by mutual agreement. It facilitates valid comparisons between organizations
and helps in elimination of inefficiencies.

Direct Costing: It is a method of costing in which the product is charged with only those
costs which vary with volume. Variable or direct costs such as direct material, direct labour
and variable manufacturing expenses are examples of costs charged to the product.

Costing & Profitability


Methods of Costing

UNIT COSTING JOB COSTING CONTRACT BATCH PROCESS


COSTING COSTING COSTING

SERVICE/ PRODUCT MULTIPLE


OPERATING COSTING COSTING
COSTING
Products
1. AAC Blocks i. MagicBond - Block Joining Mortar

2. MagicLite Panels ii. MagicPlast - Fibre Reinforced Plaster and


Readymix Plaster
3. Dry Mix Products
iii. MagicPlast - Gypsum Plaster
iv. Putty Plus - Wall Putty
v. MagicBond - Tile Adhesive-Standard
vi. MagicBond - Tile Adhesive-Elite
vii. MagicBond - Tile Adhesive-Premium
viii.MagicBond - Tile Adhesive-White
Cost sheet of  

MagicLite for Production Units


Actual Production 18,000

month of Sold Quantity


OPERATING COST
16,728

December, Variable Costs


Material Consumption Per Unit Total

2019 Pond Ash


Cement
410
210
7,380,000.00
3,780,000.00
Lime 550 9,900,000.00
Aluminium 210 3,780,000.00
Mould Oil 13 234,000.00
POP 0 -
Oil 12 216,000.00
Others 10 180,000.00

Raw material cost 1,415 25,470,000.00


Manufacturing Cost

Electricity 42 756,000.00
Coal 100 1,800,000.00
Diesel 14 252,000.00
Forklift / Hydra / JCB 23 414,000.00
Machinery Spares 21 378,000.00
Cutting 1 18,000.00
Factory Admin 9 162,000.00
Repairing 13 234,000.00
Thermokol / Patti 10 180,000.00
TOTAL 233 4,194,000.00
Personnel Cost

Contract Labour 109 1,962,000.00


Salaried Employees 90 1,620,000.00
TOTAL 199 3,582,000.00
Total Conversion cost /unit 432  
Total Variable costs /unit 1,648  
Contribution /unit 767  
Fixed Costs
Director 48 864,000.00
Staff Salary 67 1,206,000.00
Incentive 21 378,000.00
Staff Salary – A 3 54,000.00
Arrears 5 90,000.00
Administrative costs    
Taxes 0 -
Loading / Un-loading exps - Dispatch 0 -
Discount on sales 5 83,640.00
Insurance 2 36,000.00
Communication Expenses 2 36,000.00
Commission & Brokerage Expenses 0 -
Business Promotion/Adv. Exp. 28 468,384.00
Conveyance 3 50,184.00
Marketing exps 0 -
Office exps 8 144,000.00
Printing & Stationery 1 18,000.00
Computer Consumable/Software Del 4 72,000.00
Travelling Expense 1 18,000.00
Legal & Professional Expense 18 324,000.00
Rent 12 216,000.00
Other - Security/Cor. Tax 1 18,000.00
Pannel Installation Exp. 2 36,000.00
System Implementation & Audit Exp. 1 18,000.00
Other Admin Exp. 15 270,000.00
TOTAL 247 4,400,208.00
TOTAL 247 4,400,208.00
G&A costs / unit 15 270,000.00
Total Fixed costs / unit 461 8,252,208.00
     
TOTAL COST/ unit 2109  
SELLING PRICE 2415 40,398,120.00
EBITDA / unit 306  
TOTAL EBITDA   5,118,768.00
Cost Sheet Analysis
1. Contribution /Unit = Selling Price – Variable Cost

= 2415 – 1648

= 767

2. Profit Volume Ratio (%) = Contribution/sales*100

= 767/2415*100

= 31.76
Cost Sheet Analysis
3. Break Even Point (Units) = Total Fixed Cost/Contribution per unit

= 8252208/767

= 10,759.07

4. Break Even Point (Rs) = Total Fixed Cost/PVR

= 8252208/0.3176 = 25,983,022.67

5. Margin of Safety = Total Sales – Breakeven Sales

= 40398120 - 25983022

= 14,415,098.00
Learning
Outcome &
conclusion

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