Expense Category Expense

Administration $ 1,500,000.00
Mess Benefits $ 850,000.00
Computer System and WIFI $ 250,000.00
Accomodation $ 950,000.00
Library $ 100,000.00
Book Expenses $ 400,000.00
Total $ 4,050,000.00

PGP FPM IPM EXECUTIVE Total

Production sales 250 70 150 100 570
Unit Selling price $ 24,000.00 8000.00 10000.00 4000.00
Teacher Salary/student 0.02 0.02 0.02 0.02 2000.00
Semester(In a Year) 3.00 2.00 2.00 1.00 150.00
Admission Process(In Months) 1.00 1.00 1.00 1.00
Total Time(In Months) 12.00 12.00 12.00 12.00 48.00
Administration 1.00 1.00 1.00 1.00 4.00
Particulars Daily Administrative Work Development work Maintaining Record
Administration 50% 40% 10%
Mess benefits 0% 0% 0%
Computer systems and WIFI 80% 0% 20%
Accommodation 0% 0% 0%
Library 0% 0% 0%
Bokk Expenses 0% 0% 0%
Student Facilities Mess Benefits
0% 0%
0% 100%
0% 0%
100% 0%
100% 0%
100% 0%
 Resources Cost Pools

Administration Mess Benefits Computer System and WIFI Necessary Expenses

$ 1,500,000.00
$ 425,000.00 $ 425,000.00
$ 250,000.00
$ 950,000.00
$ 100,000.00
$ 400,000.00
$ 1,925,000.00 $ 425,000.00 $ 250,000.00 $ 1,450,000.00

* Half Mess Benefits are given to Administration

 Particulars Daily Administrative work Development Work Maintaining Record
Administration 962500 770000 192500
Mess Benefits 0 0 0
Computer systems and WIFI 200000 0 50000
Accommodation 0 0 0
Library 0 0 0
Book Expenses 0 0 0
Total 1162500 770000 242500
Cost Driver 150 526 4
Cost/CostDriver 7750.00 1463.88 60625.00
Student Facilities Mess Benefits
0 0
0 425000
0 0
950000 0
100000 0
400000 0
1450000 425000
10000 2000
145.00 212.50
 PGP FPM IPM Executive
Student Volume 250.00 70.00 150.00 100.00
Fees Per Student $ 24,000.00 8000.00 10000.00 4000.00
Total Revenue 6000000.00 560000.00 1500000.00 400000.00
Infrastructure Cost 250000.00 200000.00 200000.00 5000.00
Teachers Salary 2000000.00 500000.00 1000000.00 50000.00
Overhead Expenses
Scheduling production order(Semester) 23250 15500 15500 7750
Changeover (Admission Process) 17566.5 17566.5 17566.5 17566.5
Maintaining Record(Admin) 60625 60625 60625 60625
Support 6140.350877193 1719.2982456 3684.2105263 2456.1404
DL Fringe(book exp) 1062.5 297.5 637.5 425
Total 2358644.39 795708.34 1298013.25 143822.68
Total Operating Income 3641355.61 -235708.34 201986.75 256177.32
Return On sale 60.689% -42.091% 13.466% 64.044%

ABC Cost Per Unit 9434.577563205 11367.261974 8653.4216697 1438.2268

Selling Price Per Unit 24000.00 8000.00 10000.00 4000.00
Profit Per Unit 14565.42 -3367.26 1346.58 2561.77
 Total
570.00

8460000.00
655000.00
3550000.00

62000.00
70266.16
242500.00
14000.00
2422.50
4596188.66
3863811.34
45.672%
Observation
Return on sale varies based on the traditional costing method and ABC method
Red color pens are sold at price less than its cost
Purple color pens are sold at much less price than its cost
Company is making loss in selling Red and Purple color pens the overhead cost is high
Overheads increased significantly with new product

Recommandations
Increase the sales price of red and purple pens.
Minimize overhead cost