Variance Analysis
This query is : Resolved
13 November 2009
pl. answer this. This was asked in one management paper.
" A contractor has contracted to supply 10,00,000 precast concrete blocks over a period of 10 months at 1,00,000 blocks per month. at a price of Rs 110 per block. He has estimated that each block would cost him Rs.100. At the end of 3 months he has supplied 2,80,000 blocks and it has cost him Rs.103 per block. Calculate his schedule variance, Cost Variance, estimated cost to completion, estimated cost of completion and expected profit, if he has to pay liquidated damages calculated at Rs 2000/- per day of delay. He can step up his production by incurring an additional cost of Rs 3 per block from hereon and complete the supply in time. Is it worth his efforts?"
Thanks in advance:)
" A contractor has contracted to supply 10,00,000 precast concrete blocks over a period of 10 months at 1,00,000 blocks per month. at a price of Rs 110 per block. He has estimated that each block would cost him Rs.100. At the end of 3 months he has supplied 2,80,000 blocks and it has cost him Rs.103 per block. Calculate his schedule variance, Cost Variance, estimated cost to completion, estimated cost of completion and expected profit, if he has to pay liquidated damages calculated at Rs 2000/- per day of delay. He can step up his production by incurring an additional cost of Rs 3 per block from hereon and complete the supply in time. Is it worth his efforts?"
Thanks in advance:)
14 November 2009
Schedule Variance (3 m) - 20000 Adverse
Cost Variance (3 m) - Rs.8.40 Lacs Adverse
Est. Cost to Completion - Rs.1030 Lacs
Est. Cost to Completion (Rs.2000/- delay chgs) - Rs.1030.44 Lacs
And profit thereon - 69.56 Lacs
Est. Cost to Completion (Rs.3 addl. cost) - Rs.1051.60
And profit thereon - Rs.48.40 Lacs
He should not incur the addl. of of Rs.3 per block.
* It is assumed 30 days per month. Also assumed that his speed of production will remain constant @280000 blocks per 3 months
Cost Variance (3 m) - Rs.8.40 Lacs Adverse
Est. Cost to Completion - Rs.1030 Lacs
Est. Cost to Completion (Rs.2000/- delay chgs) - Rs.1030.44 Lacs
And profit thereon - 69.56 Lacs
Est. Cost to Completion (Rs.3 addl. cost) - Rs.1051.60
And profit thereon - Rs.48.40 Lacs
He should not incur the addl. of of Rs.3 per block.
* It is assumed 30 days per month. Also assumed that his speed of production will remain constant @280000 blocks per 3 months
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GSTR-1A How to update Invoice
- Excess salary payment.
- TDS on Purchase of Immovable Property by NRI from NRI
- Capital gain from sale of house property
- Stamp Paper for partnership firm change new income tax 2025
- Current Account Opening for Sole Proprietorship with Udyam Certificate - Zero Turnover
- FORM 26A APPLICABILITY
- SFT Cash Deposit in Current Account
- Value of property in capital gain
- Regarding TDS Applicability For Director Remuneration
- TDS APPLICABILITY......
- Copyright software
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
