Estimates In A Cost Sheet Using The Format

Estimates In A Cost Sheet Using The Format

You can visit the following websites and identify the product that you want to focus on.It is okay to also consider other electronics companies that you wish that are missing from the list below;

https://www.apple.com/

https://www.samsung.com/us/

https://www.lg.com/eastafrica

https://www.huawei.com

https://www.sony.com/ke/all-electronics

Assume that that the company will be producing that single product that you have selected in a factory. For this group assignment I want you to use the single/unit costing method since we are assuming the company will just be producing just one product.
Also assume that 10,000 units ofthe selected electronic product will be produced during the year 2021.Eg if you pick HUAWEI P40 Pro+ assume that during the year the company will have to produce 10,000 HUAWEI P40 Pro+ phones.
From this estimate the various costs that would be incurred within the manufacture of your selected electronic product assuming the production was taking place here in Kenya.
A Hint on this:

HUAWEI P40 Pro+

Forexample if the product you have picked is HUAWEI P40 Pro+

Direct material cost:
Direct Labour cost:
Direct Expenses:
Overheads:
You will have to first do some research to find the materials that are used to make that phone.

e.g

Direct Material cost

Cost

Camera

xxx

Screen

xxx

RAM

xxx

Processor

xxx

Motherboard

xxx

Total Direct Material cost

xxx

Add Direct Labour Cost

xxx

Add any Direct Expense

xxx

Prime cost

xxx

you need to find the material component parts that are assembled to produce the finished electronic product as illustrated in the above table**

Another example is also provided below for a laptop:(HP Spectre) The details for this can be accessed through the following link)
https://www.hp.com/us-en/shop/pdp/hp-spectre-x360-laptop-13t-touch-8ns97av-1

A laptop is produced by assembling the following parts

A motherboard:
The above laptop has the following processor;

Intel® Core™ i7-1065G7 :

Then you would search the price of that processor online;

e.g From the following link

Intel® Core™ i7-1065G7 costs $ 426

https://benchmarks.ul.com/hardware/cpu/Intel+Core+i7-1065G7+Processor+review

So the extract from the cost sheet would appear as follows within the direct material cost section:

Cost Sheet for Production of 10,000 HP Spectre X360 Laptop

Direct Material cost

Total Cost

Unit Cost

Processor Intel® Core™ i7-1065G7

$426*10000=426,000

$426

Camera

xxx

Screen

xxx

RAM

xxx

Motherboard

xxx

Total Direct Material cost

xxx

Add Direct Labour Cost

xxx

Add any Direct Expense

xxx

Prime cost

xxx

*Find other material component parts used in the laptop and find the cost of buying the component part and use that in your total direct material cost computation within the cost sheet…

A Central Processing Unit (CPU)
A Graphics Processing Unit (GPU), also known as a video card
Random Access Memory (RAM), also known as volatile memory
**Note that todays laptops are produced with the processors (CPU AND GPU) & RAM integrated within the motherboard

Storage: Solid State Drive (SSD) or Hard Disk Drive (HDD)
Laptop Screen
Laptop Keyboard
Laptop Battery
Laptop Casing Body
Laptop charger
This can be estimated by finding how much salaries and wages could be paid to the employees who are involved in the production of the product.
Estimate the direct labour cost by identifying the various labour costs relating to the employees who are expected to work on the actual production of the electronic product.
Identify and estimate any direct expenses

Identify any estimate the various overhead costs

Production/factory overheads
Administration overheads
Selling and distribution overheads
Identify and estimate the production overheads expected to be incurred in the production of the electronic product.
Identify and estimate the Administration overheads expected to be incurred in the administrative departments such as finance,transport,Human Resource.
Identify and estimate the Selling and distribution overheads expected to be incurred in the selling and distribution departments
REQUIRED:

NB:

Marks distribution:

Identification of estimation all the costs will have (20 marks)
Preparation of the cost sheet (10 marks)

**The last task will be to present your estimates in a cost sheet using the format illustrated below**

Particulars

Total Cost (‘)

Cost per unit (‘)

1.

Direct materials consumed:

– Opening Stock of Raw Material

xxx

– Add: Additions/ Purchases

xxx

– Less: Closing stock of Raw Material

(xxx)

xxx

2.

Direct employee (labour) cost

xxx

3.

Direct expenses

xxx

4.

Prime Cost (1+2+3)

xxx

5.

Works/ Factory Overheads

xxx

6.

Gross Works Cost (4+5)

xxx

7.

Add: Opening Work in Process

xxx

8.

Less: Closing Work in Process

(xxx)

9.

Works/ Factory Cost (6+7-8)

xxx

10.

Quality Control Cost

xxx

11.

Research and Development Cost

xxx

12.

Administrative Overheads (relating to production activity)

xxx

13.

Less: Credit for Recoveries/Scrap/By-Products / misc. income

(xxx)

14.

Add: Packing cost (primary)

xxx

15.

Cost of Production (9+10+11 + 12-13 + 14)

xxx

16.

Add: Opening stock of finished goods

xxx

17.

Less: Closing stock of finished goods

(xxx)

18.

Cost of Goods Sold (15+16-17)

xxx

19.

Add: Administrative Overheads (General)

xxx

20.

Add: Marketing Overheads

– Selling Overheads

xxx

– Distribution Overheads