Engineering Economics_H. Agarwal (1)

March 17, 2018 | Author: Danny García | Category: Present Value, Mathematical Finance, Mathematical Economics, Economies, Money
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Scilab Textbook Companion forEngineering Economics by H. Agarwal1 Created by Mohd Arif B.Tech Computer Engineering Uttarakhand Technical University College Teacher Arshad Khan Cross-Checked by Lavitha Pereira August 13, 2013 1 Funded by a grant from the National Mission on Education through ICT, http://spoken-tutorial.org/NMEICT-Intro. This Textbook Companion and Scilab codes written in it can be downloaded from the ”Textbook Companion Project” section at the website http://scilab.in Book Description Title: Engineering Economics Author: H. Agarwal Publisher: Anand Publications Edition: 1 Year: 2010 ISBN: 978-93-80225-47-0 1 Scilab numbering policy used in this document and the relation to the above book. Exa Example (Solved example) Eqn Equation (Particular equation of the above book) AP Appendix to Example(Scilab Code that is an Appednix to a particular Example of the above book) For example, Exa 3.51 means solved example 3.51 of this book. Sec 2.3 means a scilab code whose theory is explained in Section 2.3 of the book. 2 Contents List of Scilab Codes 4 1 Time Value of Money 7 2 Simple and compound interest 19 4 Capital Budgeting 27 5 Analysis of public projects 59 8 Product Process and Operation Costing 64 9 standard costing 91 3 . 2 2. .1 1.6.17 2. . . . . . . . . . . . . . . . . . . . Find the compounded Amount . . . . . . .9 1. . . . . . .2 Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa 1. . . . . . . . .6. . . . . . calculate compounded amount received by child . . . . . . . . . . . . .6. . 4 7 7 8 9 9 10 10 11 11 12 12 13 13 14 15 15 16 16 17 17 19 19 20 21 21 22 . . . Find the time . . . . . . . . . . .4 1. . . .3. . .List of Scilab Codes Exa Exa Exa Exa Exa Exa Exa 1. .3 2. . . .11 1. . . . . . . . . . Calculate how much amount should be deposited today Calculate borrowed sum . Calculate future value . . . . . . . Calculate Doubling Time . . . . .10 1. . . . . . . . . calculate compound value on quarterly basis . Calculate present value .3. . . . .5. . .8 1. . . . . . . . . . . . . Calculate future value . Find compound interest reckoned half yearly . . . . . . . . . . . . . . Calculate size of instalment . . . . calculate compound value on yearly basis . . . . . . . . . . . . . . . . . . Find compound interest . . . . . . . . . . . .12 1. . . . . . . . . Find the ammount and compounded interest . . . . . . . . . . . .a 2. . . . . . . . . .4 2. Calculate compound interest . .1 2. . . . . . . . .15 1. . . . . Calculate Effective rate of interest compounding half quarterly . . . . . . . . . . . . . . . . . . . . .2 1. .b Calculate compound interest . . . . . Calculate present value of a series of unequal cashflows Calculate ammount of each instalment . .1 Exa 1. . . . . .14 1. .7 1. . . . . . . . .13 1. . .3 1. . . . .a 1. . . Calculate Effective rate of interest compounding half yearly . . . . . . . . . . .5 1. . . Find compound interest reckoned quarterly .16 1. .b 1. . . Calculate Effective rate of interest compounding monthly Find out rate of interest . . . . . . Calculate annual payment . . .5. . . . calculate compounded Amount . . . . . . . . . . . . . . . . . . . . .10 4. . .12 4. . . . . . . . . .5 8. . . . . . . . . . . . .11 4. .8 2. . . . . .3 4. . . . . . .14. . . Find average investment . . Appraise profitability of proposed investment .1 4. . . . . . . . . . . . . . . . . . .7 2. . . . . . . . . .7 4. . . . . . . . .9 4. . . . .2 8. . . . .5. . . . . . . . . . Find the time .5 5. . . . . . .14. . . 5 23 23 24 24 25 25 27 27 28 29 32 32 33 34 37 38 39 40 42 44 45 46 47 49 50 52 54 55 59 62 64 65 66 69 71 73 75 . . .14.4 8. . . . . . . . . Demonstrate use of annual present and future worth operation . . . Compute Net present value . . . . . . . . . . .6 2. . . . . . . . . . . . . . . . . . . .7 Find compound interest reckoned yearly . Various process account and finished stock account . . . . . . . . . . . . . Calculate payback period . . . . . . . . . . . . . . . . . . . . . . . . . . Equivalent Production . . . . . . . .13. . . . . Calculate average rate of return . Calculate payback period . . . .c 2. . .13. . Find compound interest . . . . . . . .2 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Calculate simple interest . . . Calculate payback period . . . . Calculate Net present value . . . . . . . . Calculate profitability index . .13. .14. . Calculate accounting rate of return .13. Calculate internal rate of return . . . . . . Calculate internal rate of return . . Calculate the BC ratio . . . . .2 Exa Exa Exa Exa Exa Exa Exa Exa 5. . . Determine average rate of return . . . Find the amount . . . . . . . . . . . . . . .3 8. . . . . Calculate internal rate of return . . . . . . . . . . . . . . .1 4. .14. . . .1 8. . .1 4.3 8. . .8 4. . .3 4. . .4 4. . . . . . . .6 8. . . Find the principal amount . . . . . . . . . . Calculate average rate of return . . . . . . .Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa 2. Calculate payback period . . . . . . . . . . . . . . . . . . . . . . . . . . . Calculate payback period . . .4 4. . . . . Process account and Abnormal wastage and gain . . .2 4. . .3 4. . . Compute average rate of return . . . . . Discuss according to internal rate of return . .2 4. . . .13. . . . . . . . . . . . . . . . . . . . . . . . . . .10 4. . . . .9 2. Calculation of effective production and process cost sheet Calculation of effective production and process account Process accounts . Process account and Abnormal Loss Acount . . . . . . . . . . . . . . . . . . Calculate internal rate of return . . . .5 4. . . . . . . . .6 4. . . . . . . . . . .5 4. Compute payback period . . . . . Calculate profitability index . . . . . .4 4. . . . . . . 93 Calculate material variances . . . . . . . . .19 9. .16 9. . . . . . . . .7. . . . . . . . . 112 Calculate idle time variances . 111 Calculate idle time variances . . . . . . . . . . .18 9. . . . . . . . . . . 99 Calculate material mix variance . . . . .c 9. . . .7. .Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa Exa 8. . . . . . . . . . 84 Process account and statement of profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 Calculate material price variance . .17 9. . . . . . .5 9. . . . . . . . . 122 6 . . . . . . . . . .6 9. . .8 8. . 97 Calculate material usage variance . . . .13 9. . . . . . . . .12 9. . 114 Calculate labour variances . . . . 115 Calculate labour variances . . . . . . . .21 9. . . . . . . . . . . . . 88 Calculate material variances . . . .22 Computation of Equivalent and analysis of Cost sheet 78 Output transfered and closing and opening work in progress 81 Closing Inventory and material transfered . . . . . . . . 92 Calculate material variances . . . . . . . . .7. . . . . . . . . . . .a 9. . . . . . .12 8. . . . . . . . . 83 Process account and Unrealised profit . . . . . . . . . .4 9. . . . . . . . . 86 Labour cost and value of work in progress .9 8. . . . . . . .14 9. 106 Calculate material variances . . . . . . . . . . .15 9. . . 102 Calculate material variances .10 9. 91 Calculate material variances . . 96 Calculate material cost variances . . . 113 Calculate labour variances . . 109 Calculate labour variances . . . . 119 Calculate labour variances . . 117 Calculate labour variances . . . . . . .11 8. . . . . . . . . . . .7. . . .11 9. . . . . . . . . . . .e 9. . . . . . .3 9. . . . . . . 100 Calculate material sub usage variances . . . . .2 9. . . . . . . . .10 8. . . . . . . . . . . 110 Calculate labour variances . . 101 Calculate material variances . . . . . . . . 92 Calculate material variances . . . . .7. . . . . . . .8 9. . . . 120 Calculate labour variances . . . . . .9 9. 94 Calculate material variances when mix ratio is same . . .b 9. . 104 Calculate material variances . . . .d 9.1 9. . . . .13 9. . . . . Vo . // i n % p e r annum i = r /100. // i n Rs r =5. close . clear . n =3. // g i v e n d a t a : Vo =500. disp ( V3 .1 Calculate compound interest 1 2 3 4 5 6 7 8 9 10 11 12 13 14 // Exa1 clc .2 Calculate Doubling Time 1 // Exa2 7 .Chapter 1 Time Value of Money Scilab code Exa 1. disp ( CI . ” f u t u r e v a l u e a f t e r t h r e e y e a r s : ” ) CI = V3 . ” compound i n t e r e s t i s : ”) Scilab code Exa 1. // i n y e a r s // f o r m u l a Vn=Vo∗(1+ i ) ˆ n V3 = Vo *(1+ i ) ^ n . ” The compound v a l u e ( i n Rs . 16 disp ( doublingperiod . 5 // g i v e n d a t a : 6 i =6. ” D o u b l i n g p e r i o d ( i n y e a r s ) : ” ) . // i n % p e r annum i = r /100. 9 doublingperiod =72/ i . ” D o u b l i n g p e r i o d ( i n y e a r s ) : ” ) .2 clc .35+69/( r a t e o f i n t e r e s t ) ” ) .35+69/ i . 4 close . // i n % p e r annum 7 // we know r u l e o f 72 8 disp ( ” A c c o r d i n g t o Rule o f 72 : d o u b l i n g p e r i o d =72/( r a t e o f i n t e r e s t ) ”). 3 clear .3. Scilab code Exa 1. // i n y e a r s // i n t e r e s t i s c a l c u l a t e d i n y e a r l y b a s i s n=t. // f o r m u l a Vn=Vo∗(1+ i ) ˆ n Vn = Vo *(1+ i ) ^ n . t =3. 10 disp ( doublingperiod . close . ) : ” ) // The a n s i n t h e book i s wrong 8 . 11 12 13 14 // we know r u l e o f 69 disp ( ” A c c o r d i n g t o Rule o f 69 : d o u b l i n g p e r i o d =0. // g i v e n d a t a : Vo =1000.a calculate compound value on yearly basis 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 // Exa3a clc . disp ( Vn . clear . // i n Rs r =12. 15 doublingperiod =0. // g i v e n d a t a : Vo =500. // g i v e n d a t a : Vo =1000. clear . close . ” The compound v a l u e ( i n Rs .16 disp ( ” Note : The a n s i n t h e book i s wrong ” ) Scilab code Exa 1. clear . i = i /4. close . // i n y e a r s // i n t e r e s t i s c a l c u l a t e d i n q u a r t e r l y b a s i s n =4* t .3. // i n Rs r =16. // i n % p e r annum i = r /100.4 calculate compounded Amount 1 2 3 4 5 6 7 8 9 10 11 // Exa4 clc . // i n y e a r s // i n t e r e s t i s c a l c u l a t e d i n q u a r t e r l y b a s i s m =4. // f o r m u l a Vn=Vo∗(1+ i ) ˆ n Vn = Vo *(1+ i ) ^ n . t =3. // i n % p e r annum i = r /100. disp ( Vn . 9 .b calculate compound value on quarterly basis 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 // Exa3b clc . n =5. ) : ” ) Scilab code Exa 1. // i n Rs r =12. ) : ” ) 15 // Note : a n s w e r g i v e n i n t h e book i s n o t a c c u r a t e Scilab code Exa 1.1 Calculate Effective rate of interest compounding half yearly 1 // Exa 6 ( i ) 2 clc . 5 // g i v e n d a t a : 6 r =9. on i t s 6 t h year c h i l d w i l l r e c i e v e ( i n Rs . // i n y e a r s // i n t e r e s t i s c a l c u l a t e d i n H a l f y e a r l y b a s i s m =2. e . ” A f t e r c o m p l e t i n g 5 y e a r s i . ) : ” ) Scilab code Exa 1. close .5 calculate compounded amount received by child 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 // Exa5 clc . 3 clear . //On 6 t h y e a r means amount d e p o s i t e d f o r 5 y e a r s n =5. // g i v e n d a t a : Vo =5000. // i n % p e r annum 10 .6. 4 close . clear . // i n % p e r annum i = r /100. // i n Rs r =12.12 // f o r m u l a Vn=Vo∗(1+ i /m) ˆ (m∗n ) 13 Vn = Vo *(1+ i / m ) ^( m * n ) 14 disp ( Vn . // f o r m u l a Vn=Vo∗(1+ i /m) ˆ (m∗n ) Vn = Vo *(1+ i / m ) ^( m * n ) disp ( Vn . ” The amount w i l l be ( i n Rs . 7 i = r /100. clear . 4 close . 8 // componding i s done h a l f y e a r l y 9 m =2. close . // i n % p e r annum i = r /100. 13 disp ( %EIR . ” H a l f y e a r l y EIR ( i n %) : ” ) . // g i v e n d a t a : r =9. EIR =(1+ i / m ) ^m -1.2 Calculate Effective rate of interest compounding half quarterly 1 2 3 4 5 6 7 8 9 10 11 12 13 // Exa 6 ( i i ) clc . Scilab code Exa 1.3 Calculate Effective rate of interest compounding monthly 1 // Exa 6 ( i i i ) 2 clc .6. // f o r m u l a EIR=(1+ i /m) ˆm−1. Scilab code Exa 1. 10 // f o r m u l a EIR=(1+ i /m) ˆm−1. disp ( %EIR . 3 clear .6. // componding i s done q u a r t e r l y m =4. ” Q u a r t e r l y EIR ( i n %) : ” ) . %EIR =100* EIR . 11 EIR =(1+ i / m ) ^m -1. 12 %EIR =100* EIR . 5 // g i v e n d a t a : 11 . close . 12 : . disp ( %EIR . // componding i s done monthly m =12. // i n % p e r annum i = r /100. %EIR =100* EIR . clear . EIR =(1+ i / m ) ^m -1. 3 clear .7 Find out rate of interest 1 2 3 4 5 6 7 8 9 10 11 12 13 14 // Exa7 clc . // i n y e a r s m =2. // g i v e n d a t a : Vo =100. // i n Rs Vn =200. 4 close . // f o r m u l a EIR=(1+ i /m) ˆm−1. r = i *100. ” The r a t e o f i n t e r e s t ( i n % p e r annum ) i s ”) Scilab code Exa 1. disp (r .6 7 8 9 10 11 12 13 r =9. // i n Rs n =7. ” Monthly EIR ( i n %) : ” ) . Scilab code Exa 1.8 Calculate future value 1 // Exa8 2 clc . // f o r h a l f y e a r l y compounding // f o r m u l a Vn=Vo∗(1+ i /m) ˆ (m∗n ) // s o l v i n g f o r i g i v e s i = m *( %e ^(( log ( Vn / Vo ) ) /( m * n ) ) -1) . . . ) i s : ” ) // Note : a n s w e r g i v e n i n t h e book i s n o t a c c u r a t e Scilab code Exa 1. // i n Rs R2 =10000. clear . disp ( FVA . . . close . . 16 disp ( V5 . . .10 Find the compounded Amount 13 . // i n y e a r s // f o r m u l a Vn=R1∗(1+ i ) ˆ ( n −1)+R2∗(1+ i ) ˆ ( n −2) + . . n =5. // g i v e n d a t a : A =1000. . . . // i n % p e r annum i = r /100. n =12. // i n Rs R3 =15000. // i n y e a r s // f o r m u l a FVA=(A∗(1+ i ) ˆn −1) / i . FVA =( A *((1+ i ) ^n -1) ) / i .// g i v e n d a t a : R1 =5000. . // i n Rs r =16. // i n Rs r =10. ” The f u t u r e v a l u e o f t h i s s e r i e s o f payments ( i n Rs ) w i l l be : ” ) 5 6 7 8 9 10 11 12 13 14 Scilab code Exa 1. + Rn−1∗(1+ i )+Rn 15 V5 = R1 *(1+ i ) ^( n -1) + R2 *(1+ i ) ^( n -2) + R3 *(1+ i ) ^( n -3) + R4 *(1+ i ) ^( n -4) + R5 .9 Calculate future value 1 2 3 4 5 6 7 8 9 10 11 12 13 // Exa9 clc . ” The f u t u r e v a l u e ( i n Rs . // i n % p e r annum i = r /100. // i n Rs R5 =8000. // i n Rs R4 =10000. // c a l c u l a t i n g FVA t a k i n g i =EIR . close . // i n % p e r annum i = r /100. // i n Rs n =18. EIR =(1+ i / m ) ^m -1.11 Calculate present value 1 2 3 4 5 6 7 8 9 10 11 12 // Exa11 clc . // g i v e n d a t a : Vn =5000. clear .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 // Exa10 clc . // componding i s done h a l f y e a r l y m =2. // Note : a n s w e r g i v e n i n t h e book i s n o t a c c u r a t e Scilab code Exa 1. FVA =( A *((1+ i ) ^n -1) ) / i . // f o r m u l a EIR=(1+ i /m) ˆm−1. close . // g i v e n d a t a : r =6. ” P r e s e n t v a l u e i s : ” ) 14 . // f o r m u l a FVA=(A∗(1+ i ) ˆn −1) / i . // i n y e a r s // f o r m u l a f o r p r e s e n t v a l u e Vo=Vn/(1+ i ) ˆ n Vo = Vn /(1+ i ) ^ n . n =5. disp ( FVA . disp ( Vo . A =100. // i n y e a r s i = EIR . // i n Rs r =10. clear . // i n % p e r annum i = r /100. ” F u t u r e V a l u e o f amount ( i n Rs ) : ” ) . 13 Calculate borrowed sum 1 2 3 4 5 6 7 8 9 // Exa13 clc . Vo = Vn /(1+ i ) ^ n . disp ( Vo . // i n % p e r annum i = r /100. // i n y e a r s m =2. ” P r e s e n t v a l u e i s : ” ) Scilab code Exa 1. // f o r h a l f y e a r l y compounding // f o r m u l a EIR=(1+ i /m) ˆm−1. close . EIR =(1+ i / m ) ^m -1. // i n % p e r annum i = r /100. close . // g i v e n d a t a : R1 =676. // i n Rs r =4.Scilab code Exa 1. clear . // i n Rs R2 =676. // i n Rs r =12. n =5. // g i v e n d a t a : Vn =15000. i = EIR .12 Calculate how much amount should be deposited today 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 // Exa12 clc . clear . 15 . // f o r m u l a f o r p r e s e n t v a l u e Vo=Vn/(1+ i ) ˆ n // t a k i n g i =EIR . 12 Vo = R1 /(1+ i ) ^(1) + R2 /(1+ i ) ^(2) .15 Calculate ammount of each instalment 1 // Exa15 2 clc . . . n =5. + Rn/(1+ i ) ˆ n . . . . . // i n Rs R5 =2000. . // i n Rs R3 =10000.10 n =2. // i n Rs R4 =3000. 16 . // g i v e n d a t a : R1 =5000. . . . . 16 disp ( PV . 13 disp ( Vo . // i n Rs R2 =10000. ” P r e s e n t v a l u e i s : ” ) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Scilab code Exa 1. 3 clear . // i n % p e r annum i = r /100.14 Calculate present value of a series of unequal cashflows // Exa14 clc . . close . ” The b o r r o w e d sum i s : ” ) Scilab code Exa 1. // i n Rs r =10. . 15 PV = R1 /(1+ i ) ^(1) + R2 /(1+ i ) ^(2) + R3 /(1+ i ) ^(3) + R4 /(1+ i ) ^4+ R5 /(1+ i ) ^5. // i n y e a r s 11 // f o r m u l a f o r p r e s e n t v a l u e o f s e r i e s payments V0=R1 /(1+ i ) ˆ ( 1 )+R2/(1+ i ) ˆ ( 2 ) + . clear . // i n y e a r s // f o r m u l a f o r p r e s e n t v l u e o f s e r i e s payments PV=R1 /(1+ i ) ˆ ( 1 )+R2/(1+ i ) ˆ ( 2 ) + . 17 . ” The amount o f e a c h i n v e s t m e n t ( i n Rs ) i s : ” ) 13 // Note : a n s w e r g i v e n i n t h e book i s n o t a c c u r a t e Scilab code Exa 1. 12 disp (R . clear .4 5 6 7 8 9 10 close . n =5.17 Calculate size of instalment 1 // Exa17 2 clc . // i n Rs r =4. 11 R =( Vn * i ) /((1+ i ) ^n -1) . 11 A =( Vo *( i *((1+ i ) ^ n ) ) ) /((1+ i ) ^n -1) 12 disp (A . // i n % p e r annum i = r /100. // i n y e a r s // f o r m u l a f o r a n n u i t y can be d e t e r m i n e d by Vo=(A ∗((1+ i ) ˆn−1) ) / ( i ∗((1+ i ) ˆ n ) ) . ” R e q u i r e d v a l u e ( i n Rs ) : ” ) 13 // Note : a n s w e r g i v e n i n t h e book i s n o t a c c u r a t e 1 2 3 4 5 6 7 8 9 10 Scilab code Exa 1.16 Calculate annual payment // Exa16 clc . n =10. // g i v e n d a t a : Vo =20000. close . // i n % p e r annum i = r /100. // g i v e n d a t a : Vn =500000. // i n Rs r =10. // i n y e a r s // Formula f o r n e e d e d a n n u a l payment R=(Vn∗ i ) /((1+ i ) ˆ n −1) . // i n Rs r =8. n =5.3 4 5 6 7 8 9 10 clear . // i n % p e r annum i = r /100. // i n y e a r s // Formula f o r s i z e o f i n s t a l l m e n t can be c a l c u l a t e d by Vo=(A∗((1+ i ) ˆn−1) ) / ( i ∗(1+ i ) ˆ n ) . // g i v e n d a t a : Vo =200000. 11 A =( Vo *( i *(1+ i ) ^ n ) ) /((1+ i ) ^n -1) . ” R e q u i r e d v a l u e ( i n Rs ) : ” ) 13 // Note : a n s w e r g i v e n i n t h e book i s n o t a c c u r a t e 18 . close . 12 disp (A . close . 3 clear . // i n r u p e e s n =3. 19 . // g i v e n d a t a i s : P =10000.1 Calculate compound interest 1 2 3 4 5 6 7 8 9 10 11 // Exa1 clc . ” Scilab code Exa 2. //% p e r annum A = P *(1+ r /100) ^ n . // i n y e a r s r =10.P . // i n r u p e e s disp ( ”Compound i n t e r e s t ) i s : ” + string ( CI ) + ” Rupees .2 Find compound interest 1 // Exa2 2 clc . clear . CI =A .Chapter 2 Simple and compound interest Scilab code Exa 2. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 close ; // For f i r s t y e a r P1 =500; // i n r u p e e s n =3; // i n y e a r s r =10; //% p e r annum T =1 // i n y e a r I1st =( P1 * r * T ) /100; A1 = P1 + I1st ; // For s e c o n d y e a r P2 = A1 ; I2nd =( P2 * r * T ) /100; A2 = P2 + I2nd ; // For t h i r d y e a r P3 = A2 ; I3rd =( P3 * r * T ) /100; A3 = P3 + I3rd ; // compound i n t e r e s t o r 3 y e a r s CI = A3 - P1 ; disp ( ”Compound i n t e r e s t i s : ” + string ( CI ) + ” Rupees . ” ) Scilab code Exa 2.3 Find the ammount and compounded interest 1 2 3 4 5 6 7 8 9 10 11 12 // Exa2 clc ; clear ; close ; // g i v e n d a t a i s : P =5000; // i n r u p e e s n =3/2; // i n y e a r s r =10/2; //% p e r annum p a i d h a l f y e a r l y m =2; // f r e q o f compounding A = P *(1+ r /100) ^( m * n ) ; CI =A - P ; // i n r u p e e s disp ( ”Compound i n t e r e s t i s : ” + string ( CI ) + ” Rupees . ” 20 ) Scilab code Exa 2.4 Find the time 1 // Exa4 2 clc ; 3 clear ; 4 close ; 5 // g i v e n d a t a i s : 6 n =3; // i n y e a r s 7 disp ( ” L e t P=x t h e n A=2∗x ” ) ; 8 disp ( ” L e t r% be t h e r a t e o f i n t e r e s t ” ) ; 9 // f o r m u l a : A=P(1+ r / 1 0 0 ) ˆn ; 10 // p u t t i n g v a l u e s 11 disp ( ” 2∗ x=x (1+ r / 1 0 0 ) ˆ3 ” ) ; 12 disp ( ” o r ” ) ; 13 disp ( ”2=(1+ r / 1 0 0 ) ˆ3 ” ) 14 // on s o l v i n g t h i s eqn 15 r =((2^(1/3) ) -1) *100; // i n % 16 disp (r , ” r a t e i s c o m t u t e d : ” ) 17 disp ( ” s u p p o s e i n n y e a r s t h e amount x w i l l become 16∗ x , t h e n by f o r m u l a ” ) 18 // 16=(1+ r / 1 0 0 ) ˆn ; 19 n = log (16) / log (1+ r /100) ; 20 disp ( ” Time i s : ” + string ( n ) + ” y e a r s ” ) ; Scilab code Exa 2.5.a Find compound interest reckoned quarterly 1 // Exa5 ( a ) 2 clc ; 3 clear ; 4 close ; 5 // g i v e n d a t a is : 21 6 7 8 9 10 11 12 13 14 15 P =4000; // i n r u p e e s N =9; // months R =6; // i n % p e r annum // i f i n t e r e s t i s r e c k o n e d q u a r t e r l y r = R /4; // i n % p e r q u a r t e r , a s t h e r e a r e 4 q u a r t e r s i n a year n =( N /12) *4; // i n q u a r t e r s Amount1 = P *(1+ r /100) ^ n ; CI1 = Amount1 - P ; disp ( CI1 , ”Compound i n t e r e s t w h i l e r e c k o n e d q u a r t e r l y : ”) // Ans i n t h e book i s n o t c o r r e c t Scilab code Exa 2.5.b Find compound interest reckoned half yearly 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 // Exa5 ( b ) clc ; clear ; close ; // g i v e n d a t a i s : P =4000; // i n r u p e e s N =9; // months R =6; // i n % p e r annum // i f i n t e r e s t i s r e c k o n e d h a l f y e a r l y r = R /2; // i n % p e r h a l f y e a r l y , a s t h e r e a r e 2 h a l f years in a year n =( N /12) *2; // i n h a l f y e a r s Amount2 = P *(1+ r /100) ^ n ; CI2 = Amount2 - P ; disp ( CI2 , ”Compound i n t e r e s t w h i l e r e c k o n e d h a l f y e a r l y : ”) // Ans i n t h e book i s n o t c o r r e c t 22 Scilab code Exa 2. // i n % p e r annum // i f i n t e r e s t i s r e c k o n e d y e a r l y r = R .5. // months R =6. // i n % p e r annum f o r 3 r d y e a r A = P *(1+ r1 /100) *(1+ r2 /100) *(1+ r3 /100) . disp ( ”Compound i n t e r e s t i s : ” + string ( CI ) + ” Rupees . // g i v e n d a t a i s : P =4000. disp ( CI3 . // y e a r s r1 =4. CI3 = Amount3 . clear . CI =A . // i n r u p e e s N =9. clear . close . ”Compound i n t e r e s t w h i l e r e c k o n e d y e a r l y : ” ) 15 // Ans i n t h e book i s n o t c o r r e c t 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Scilab code Exa 2. // g i v e n d a t a i s : P =10000.c Find compound interest reckoned yearly // Exa5 ( c ) clc .P . // i n % p e r annum f o r 1 s t y e a r r2 =5.6 Find compound interest 1 2 3 4 5 6 7 8 9 10 11 12 13 // Exa6 clc . ” ) 23 . close .P . // i n % p e r annum n =( N /12) . // i n r u p e e s N =3. // i n y e a r s Amount3 = P *(1+ r /100) ^ n . // i n % p e r annum f o r 2 nd y e a r r3 =10. 7 Find the amount 1 2 3 4 5 6 7 8 9 10 11 12 13 // Exa7 clc . // s o l v i n g t h i s eqn P = CI /((1+ r /100) ^n -1) .50. close . // g i v e n d a t a i s : CI =496. clear . // i n r u p e e s r =10. ” ) 24 r i s e t o Rs . // compound i n t e r e s t i n r u p e e s n =3. close .8 Find the time 1 2 3 4 5 6 7 8 9 10 11 12 // Exa8 clc . // g i v e n d a t a i s : P =2000.Scilab code Exa 2. ” ) Scilab code Exa 2. disp ( ” The t i m e i n which Rs . // i n y e a r s r =10. clear . // i n r u p e e s A =2662. disp ( ” CI=P(1+ r / 1 0 0 ) ˆn−P” ) . // r a t e i n % p e r annum disp ( ” CI i s g i v e n by : ” ) . disp ( ” P r i n c i p a l amount i s : ” + string ( P ) + ” Rupees . //% p e r annum // f o r m u l a : A=P(1+ r / 1 0 0 ) ˆn . // s o l v i n g f o r n n = log ( A / P ) / log (1+ r /100) . 2 0 0 0 w i l l 2662 i s : ” + string ( n ) + ” y e a r s . . g i v e n disp ( ” s o l v i n g e q n s f o r CI and SI . 25 .Scilab code Exa 2. // g i v e n d a t a i s : CI =102. // g i v e n d a t a i s : r =5. // i n % p e r annum n =2. // CI−S I =15 Rupees .1 0∗P” ) . ” ) Scilab code Exa 2. close . close . clear . // u s i n g CI−S I disp ( ” P r i n c i p a l amount i s : ” + string ( P ) + ” Rupees . P =15/(0. 1 0 2 5 ∗P” ) .9 Find the principal amount 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 // Exa9 clc . disp ( ” S I =0 . // S I =(P∗ r ∗n ) / 1 0 0 . clear .1025 -0. // i n y e a r s // L e t p r i n c i p a l amount i s P // Amount w i l l be : A=P+102 // f o r m u l a : A=P(1+ r / 1 0 0 ) ˆn=P+102. // i n r u p e e s r =4. we g e t : ” ) disp ( ” CI = 0 . //% p e r annum n =2. // i n y e a r s // l e t amount=P // CI=P(1+ r / 1 0 0 ) ˆn−P .10) .10 Calculate simple interest 1 2 3 4 5 6 7 8 9 10 11 // Exa9 clc . 12 P =102/((1+ r /100) ^n -1) . ” ) 26 . 14 disp ( ” S i m p l e i n t e r e s t i s : ” + string ( SI ) + ” Rupees . 13 SI =( P * r * n ) /100. 5 // g i v e n d a t a : 6 OrgInv =50000.2 Calculate payback period 1 // Exa 2 2 clc . 3 clear . // i n Rs . 4 close .Chapter 4 Capital Budgeting Scilab code Exa 4. 4 close . 3 clear .1 Calculate payback period 1 // Exa 1 2 clc . 8 PaybackPeriod = OrgInv / AnnualCashInflow . Scilab code Exa 4. ” Payback p e r i o d o f t h e p r o j e c t ( i n y e a r s ) i s : ”). // i n Rs . 7 AnnualCashInflow =10000. 5 // g i v e n d a t a : 27 . 9 disp ( PaybackPeriod . disp ( ” I n t h e t a b l e i t can be s e e n t h a t i n 3 y e a r s 9 0 0 0 0 Rs h a s b e e n r e c o v e r e d . g i v e n 3 y e a r s and two month . 5 // g i v e n d a t a f o r p r o j e c t A : 6 Investment =100000. but i t i s 3 . // r e m a i n i n g b a l a n c e t o be r e c o v e r e d C =50000.3 Calculate payback period 1 // Exa 1 2 clc . CIF3 =40000. CumCIF2 =50000. 1 0 0 0 0 i s l e f t out o f i n i t i a l investment . // i n Rs . // i n y e a r s 28 . 3 r d and 4 t h y e a r s CIF1 =20000. Scilab code Exa 4. // i n Rs . 3 r d and 4 t h years CumCIF1 =20000. // i n Rs .6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 // c a s h i n f l o w s o f 1 s t . // Cummulative c a s h i n f l o w s o f 1 s t . // i n Rs . CIF4 =50000. 2 y e a r s and can s a y 3 y e a r s 2 month p l u s 12 d a y s . // i n Rs 8 PayBackPeriod = Investment / AnnCIF . // i n Rs . // i n Rs . ” ) E =3. ” Payback p e r i o d o f t h e p r o j e c t ( i n y e a r s ) i s : ”). CumCIF3 =90000. 2 nd . 3 clear . // Note : a n s i n t h e book i s n o t a c c u r a t e . ”) disp ( ” Payback p e r i o d i s b e t w e e n 3 and 4 y e a r s . Rs . // i n Rs . disp ( PaybackPeriod . 2 nd . CIF2 =30000. CumCIF4 =140000. // i n Rs . // c a s h f l o w o f l a s t y e a r PaybackPeriod = E + B / C . // i n Rs 7 AnnCIF =25000. 4 close . B =100000 -90000. ” Payback p e r i o d o f t h e in years ) i s : ”) // g i v e n d a t a f o r p r o j e c t C : Investment =32500. 5 // g i v e n d a t a : 29 . // i n Rs PayBackPeriod = Investment / AnnCIF . ” Payback p e r i o d o f t h e in years ) i s : ”) // g i v e n d a t a f o r p r o j e c t D : Investment =97000.9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 disp ( PayBackPeriod .4 Calculate payback period 1 // Exa 4 2 clc . // i n y e a r s disp ( PayBackPeriod . // i n Rs AnnCIF =15000. 4 close . ” Payback p e r i o d o f t h e in years ) i s : ”) p r o j e c t A( p r o j e c t B( p r o j e c t C( p r o j e c t D( // g i v e n d a t a f o r p r o j e c t E : Investment =58500. 3 clear . // i n Rs AnnCIF =15500. // i n y e a r s disp ( PayBackPeriod . // i n y e a r s disp ( PayBackPeriod . ” Payback p e r i o d o f t h e p r o j e c t E( in years ) i s : ”) Scilab code Exa 4. ” Payback p e r i o d o f t h e in years ) i s : ”) // g i v e n d a t a f o r p r o j e c t B : Investment =70000. // i n Rs PayBackPeriod = Investment / AnnCIF . // i n Rs PayBackPeriod = Investment / AnnCIF . // i n y e a r s disp ( PayBackPeriod . // i n Rs PayBackPeriod = Investment / AnnCIF . // i n Rs AnnCIF =18000. // i n Rs AnnCIF =9000. 30 . CIF4 =10000. CumCIF2 =60000. 3 rd . CIF5 =5000. // i n Rs . // i n Rs . CIF2 =40000. CIF2 =30000. CIF3 =20000. // P r o j e c t B : Cummulative c a s h i n f l o w s o f 1 s t . // i n i t i a l i n v e s t m e n t i n Rs . CIF3 =30000. // i n Rs . 3 rd . // i n Rs . // P r o j e c t A : Cummulative c a s h i n f l o w s o f 1 s t . // r e m a i n i n g b a l a n c e t o be r e c o v e r e d C =30000. 3 rd . 2 nd . 2 nd . 4 t h and 5 th y e a r s CIF1 =30000. 3 rd . // i n Rs . disp ( PaybackPeriod . // P r o j e c t B : c a s h i n f l o w s o f 1 s t . CumCIF3 =90000. 4 t h and 5 th y e a r s CIF1 =30000. 4 t h and 5 t h y e a r s CumCIF1 =30000. CIF4 =30000. B =100000 -90000. // i n Rs . Rs . CIF5 =30000. CumCIF4 =120000. // i n Rs . // c a s h f l o w o f l a s t payback y e a r PaybackPeriod = E + B / C . 2 nd . // i n Rs . // i n Rs . and e q u a l for all projects // P r o j e c t A : c a s h i n f l o w s o f 1 s t . // i n Rs . // i n Rs . // i n Rs . // i n Rs . 4 t h and 5 t h y e a r s CumCIF1 =30000.6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 inINV =100000. // i n Rs . CumCIF5 =150000. ”) disp ( ” Payback p e r i o d i s b e t w e e n 3 and 4 y e a r s . // i n Rs . disp ( ” I n t h e t a b l e i t can be s e e n t h a t i n 3 y e a r s 9 0 0 0 0 Rs h a s b e e n r e c o v e r e d . // i n Rs . 2 nd . 1 0 0 0 0 i s l e f t out o f i n i t i a l investment . ” ) E =3. ” Payback p e r i o d o f t h e p r o j e c t A( i n y e a r s ) i s : ”). CumCIF2 =70000; // i n Rs . CumCIF3 =90000; // i n Rs . CumCIF4 =100000; // i n Rs . CumCIF5 =105000; // i n Rs . disp ( ” I n t h e t a b l e i t can be s e e n t h a t i n c o m p l e t e 4 y e a r s 1 0 0 0 0 0 Rs h a s b e e n r e c o v e r e d . ” ) 41 disp (4 , ” Payback p e r i o d o f t h e p r o j e c t B( i n y e a r s ) i s : ”); 36 37 38 39 40 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 // P r o j e c t C : c a s h i n f l o w s o f 1 s t , 2 nd , 3 rd , 4 t h and 5 th y e a r s CIF1 =40000; // i n Rs . CIF2 =20000; // i n Rs . CIF3 =30000; // i n Rs . CIF4 =40000; // i n Rs . CIF5 =10000; // i n Rs . // P r o j e c t C : Cummulative c a s h i n f l o w s o f 1 s t , 2 nd , 3 rd , 4 t h and 5 t h y e a r s CumCIF1 =40000; // i n Rs . CumCIF2 =60000; // i n Rs . CumCIF3 =90000; // i n Rs . CumCIF4 =130000; // i n Rs . CumCIF5 =140000; // i n Rs . disp ( ” I n t h e t a b l e i t can be s e e n t h a t i n 3 y e a r s 9 0 0 0 0 Rs h a s b e e n r e c o v e r e d , Rs . 1 0 0 0 0 i s l e f t out o f i n i t i a l investment . ”) disp ( ” Payback p e r i o d i s b e t w e e n 3 and 4 y e a r s . ” ) E =3; B =100000 -90000; // r e m a i n i n g b a l a n c e t o be r e c o v e r e d C =40000; // c a s h f l o w o f l a s t payback y e a r PaybackPeriod = E + B / C ; disp ( PaybackPeriod , ” Payback p e r i o d o f t h e p r o j e c t C( i n y e a r s ) i s : ”); // f i n a l c o n c l u s i o n disp ( ” As a l l t h e p r o j e c t s have payback p e r i o d o f l e s s t h a n 5 y e a r s and 5 y e a r s i s t h e s t a n d a r d payback p e r i o d , a l l t h e t h r e e p r o j e c t s a r e 31 a c c e p t a b l e . ”) Scilab code Exa 4.5 Find average investment 1 // Exa 5 2 clc ; 3 clear ; 4 close ; 5 // g i v e n d a t a : 6 InInv =30000; // i n i t i a l i n v e s t m e n t i n Rs . 7 SalvageValue =3000; // i n Rs . 8 WorkingCapital =6000; // i n Rs . 9 Life =4; // e x p e c t e d l i f e o f t h e p r o j e c t 10 // A v e r a g e I n v e s t m e n t i s g i v e n by : AvgInv =( I n I n v − S a l v a g e V a l u e ) /2+ S a l v a g e V a l u e+W o r k i n g C a p i t a l AvgInv =( InInv - SalvageValue ) /2+ SalvageValue + WorkingCapital 12 disp ( AvgInv , ” A v e r a g e i n v e s t m e n t o f t h e p r o j e c t i s : ”) 11 Scilab code Exa 4.6 Calculate accounting rate of return 1 2 3 4 5 6 7 8 9 10 11 // Exa 6 clc ; clear ; close ; // g i v e n d a t a : CostofMac =80000; // i n Rs . SalvageValue =10000 // i n Rs . // P r o f i t s o f 1 s t , 2 nd , 3 rd , 4 t h and t h y e a r s P1 =20000; // i n Rs . P2 =40000; // i n Rs . P3 =30000; // i n Rs . 32 12 P4 =15000; // i n Rs . 13 P5 =5000; // i n Rs . 14 // T o t a l p r o f i t b e f o r e d e p r e c i a t i o n 15 Pbd = P1 + P2 + P3 + P4 + P5 ; // i n Rs . 16 disp ( Pbd , ” T o t a l p r o f i t b e f o r e d e p r e c i a t i o n ( i n Rs ) : 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 ”) AvgP = Pbd /5; // A v e r a g e p r o f i t p e r annum disp ( AvgP , ” A v e r a g e p r o f i t p e r annum ( i n Rs . ) : ” ) // T o t a l D e p r e c i a t i o n o f t h e machine TotDep = CostofMac - SalvageValue disp ( TotDep , ” T o t a l D e p r e c i a t i o n o f t h e machine ( i n Rs . ) : ”) // A v e r a g e D e p r e c i a t i o n p e r annum AvgD = TotDep /5; disp ( AvgD , ” A v e r a g e D e p r e c i a t i o n p e r annum ( i n Rs . ) : ”) // A v e r a g e a n n u a l p r o f i t a f t e r D e p r e c i a t i o n AvgPafterDepreciation = AvgP - AvgD ; disp ( AvgPafterDepreciation , ” A v e r a g e a n n u a l p r o f i t a f t e r D e p r e c i a t i o n ( i n Rs . ) : ” ) // Return on o r i g i n a l i n v e s t m e n t ReturnOnOrg =( AvgPafterDepreciation / CostofMac ) *100; // in % disp ( ReturnOnOrg , ” Return on o r i g i n a l i n v e s t m e n t ( i n % ) : ”) // Return on a v e r a g e i n v e s t m e n t ReturnOnAvgInv =( AvgPafterDepreciation /(( CostofMac + SalvageValue ) /2) ) *100; // i n % disp ( ReturnOnAvgInv , ” Return on a v e r a g e i n v e s t m e n t ( i n %) : ” ) Scilab code Exa 4.7 Calculate average rate of return 1 // Exa 7 2 clc ; 33 // i n % disp ( ARR . // i n Rs P5 =10000. // i n Rs P2 =6000. // Tax 50% Tax =( NetIncomebefTax *50) /100. // S c r a p V a l u e ScrapValue =5000 // i n Rs . // T o t a l D e p r e c i a t i o n by s t r a i g h t l i n e method D =4000*5. // i n Rs . // i n Rs . // i n Rs P4 =8000. // A v e r a g e D e p r e c i a t i o n AvgD = D /5. // i n Rs . // i n Rs // T o t a l P r o f i t P = P1 + P2 + P3 + P4 + P5 . // g i v e n d a t a : // I n i t i a l I n v e s t m e n t InINv =25000. close . // i n RS . // i n Rs P3 =7000. // i n Rs . ” A v e r a g e r a t e o f r e t u r n on a v e r a g e Investment in % : ”) 34 .Tax .3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 clear . disp ( AvgInv . // i n Rs // Net i n c o m e b e f o r e t a x NetIncomebefTax = AvgP . // i n Rs // A v e r a g e a n n u a l i n c o m e a f t e r t a x and d e p r e c i a t i o n NetInc = NetIncomebefTax .AvgD . ” A v e r a g e I n v e s t m e n t i n Rs . // i n Rs . // A v e r a g e P r o f i t AvgP = P /5. // A v e r a g e I n v e s t m e n t AvgInv =( InINv + ScrapValue ) /2. : ” ) // A v e r a g e r a t e o f r e t u r n on a v e r a g e I n v e s t m e n t ARR =( NetInc / AvgInv ) *100. // P r o f i t b e f o r e t a x and D e p r e c i a t i o n P1 =5000. // i n Rs . 9 // E s t i m a t e d L i f e 10 life =5. 7 // A d d i t i o n a l I n v e s t m e n t I n w o r k i n g c a p i t a l 8 AddInv =5000. I4 =19375. // Tax by 60 % Tax =( AvgID *60) /100. // T o t a l Income I = I1 + I2 + I3 + I4 + I5 .D . 3 clear . // i n Rs . // i n Rs . // i n Rs . // i n Rs // A v e r a g e Income a f t e r D e p r e c i a t i o n AvgID = AvgI . 13 // A v e r a g e Income Tax Rate 14 Trate =60. 4 close . // i n Rs .8 Determine average rate of return 1 // Exa 8 2 clc . // i n RS . // i n % 15 // A v e r a g e e s t i m a t e d i n c o m e b e f o r e t a x and 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Depreciation I1 =13375.Scilab code Exa 4.Tax . // i n Rs 35 . // i n Rs . I5 =21375. // i n y e a r s 11 // E s t i m a t e d S a l v a g e v a l u e 12 Salvage =3000. // i n Rs . // D e p r e c i a t i o n by s t r a i g h t l i n e D =( OrgCost . // i n Rs . // a v e r a g e i n c o m e b e f o r e t a x and d e p r e c i a t i o n AvgI = I /5. // i n Rs // A v e r a g e Rate o f Return ARR =( AvgITD /(( OrgCost + Salvage ) /2+ AddInv ) ) *100. I3 =17375. // i n Rs .Salvage ) /5. // i n Rs . // i n Rs // Income a f t e r t a x and d e p r e c i a t i o n AvgITD = AvgID . I2 =15375. 5 // g i v e n d a t a f o r machine A : 6 OrgCost =56125. // i n Rs // Income a f t e r t a x and d e p r e c i a t i o n AvgITD = AvgID . // i n Rs // A v e r a g e Rate o f Return ARR =( AvgITD /(( OrgCost + Salvage ) /2+ AddInv ) ) *100. I5 =13375. // i n y e a r s // E s t i m a t e d S a l v a g e v a l u e Salvage =3000. I2 =19375. // i n Rs . // i n Rs .35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 disp ( ARR . // i n Rs . // Tax by 60 % Tax =( AvgID *60) /100. // a v e r a g e i n c o m e b e f o r e t a x and d e p r e c i a t i o n AvgI = I /5. // i n RS . // i n % // A v e r a g e e s t i m a t e d i n c o m e b e f o r e t a x and Depreciation I1 =21375. // i n Rs . // i n Rs . // A v e r a g e Income Tax Rate Trate =60. // i n Rs disp ( ARR . ” A v e r a g e Rate o f Return o f machine A i n % : ”) // g i v e n d a t a f o r machine B : OrgCost =56125. // i n Rs .Tax . // i n Rs . // E s t i m a t e d L i f e life =5. ” A v e r a g e Rate o f Return o f machine B i n % : ”) 36 . // T o t a l Income I = I1 + I2 + I3 + I4 + I5 .Salvage ) /5. I3 =17375. // i n Rs . // A d d i t i o n a l I n v e s t m e n t I n w o r k i n g c a p i t a l AddInv =6000. // D e p r e c i a t i o n by s t r a i g h t l i n e D =( OrgCost . I4 =15375. // i n Rs // A v e r a g e Income a f t e r D e p r e c i a t i o n AvgID = AvgI . // i n Rs .D . // i n Rs . 9 Appraise profitability of proposed investment // Exa 9 clc .909.Scilab code Exa 4. // i n Rs P2 = CIF2 * PV2 . // u n i t l e s s disp ( PVI . 3 r d and 4 t h y e a r s CIF1 =20000. V f a c t o r a t 10% r a t e o f d i s c o u n t PV1 =0. CIF2 =15000. // i n Rs . // i n Rs disp ( NPV . // i n Rs . ” Net P r e s e n t V a l u e i s : ” ) // p r o f i t a b o l i t y i n d e x PVI = P / ICO . ” P r o f i t a b i l i t y I n d e x o f t h e p r o j e c t a s c a l c u l a t e d i s : ”) 31 disp ( ” As P r o f i t a b i l i t y I n d e x o f t h e p r o j e c t i s 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 37 . close . // c a s h i n f l o w s o f 1 s t . // i n Rs P3 = CIF3 * PV3 . 2 nd . // i n Rs . // P r e s e n t v a l u e f o r a l l c a s h i n f l o w s P1 = CIF1 * PV1 . // i n Rs // T o t a l P r e s e n t V a l u e P = P1 + P2 + P3 + P4 . PV2 =0. CIF3 =25000. // i n Rs . PV4 =0.ICO . clear . //P .683. // i n Rs // Net P r e s e n t V a l u e NPV =P .826.751. // i n Rs . // g i v e n d a t a : // i n i t i a l c a s h o u t f l o w s ICO =50000. // i n Rs P4 = CIF4 * PV4 . CIF4 =10000. PV3 =0. 4 9 3 6 and 2 .32 33 34 35 g r e a t e r t h a n 1 . // c a s h i n f l o w s o f 1 s t . // g i v e n d a t a : // i n i t i a l c a s h o u t f l o w s ICO =40000. P r e s e n t v a l u e a t h i g h e r r a t e o f 38 . Lower d i s c o u n t r a t e HDR =22. // i n Rs . ” a t 22% PV o f c a s h i n f l o w s ( i n Rs ) i s : ” ) //By i n t e r p o l a t i o n LDR =20. close . t h e p r o p o s a l can be a c c e p t e d . // u n i t l e s s disp ( PV . disp ( ” Hence IRR o f t h e p r o j e c t i s e x p e c t e d t o l i e b e t w e e n 20% and 22%” ) //PV o f c a s h i n f l o w s a t 20% PV20 = CIF *2. // i n Rs . ” a t 20% PV o f c a s h i n f l o w s ( i n Rs ) i s : ” ) disp ( PV22 . t h e p r o p o s a l may be a c c e p t e d .4936. P r e s e n t v a l u e a t l o w e r r a t e o f interest P2 =39898. 5 8 8 7 ” ) . ”PV f a t o r o f t h e p r o j e c t i s : ” ) disp ( ” T h i s v a l u e i s i n b e t w e e n 2 . //PV F a c t o r PV = ICO / CIF . 2 nd .5887. 3 r d and 4 t h y e a r s i s same CIF =16000. clear . // i n Rs . // i n Rs . // i n % . H i g h e r d i s c o u n t r a t e P1 =41419.10 Calculate internal rate of return 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 // Exa 10 clc . ” ) // Net p r o f i t a b i l i t y NPVI = NPV / ICO . // i n % . ” ) Scilab code Exa 4. disp ( NPVI . // i n Rs disp ( PV20 . ” Net p r o f i t a b i l i t y o f t h e p r o j e c t i s : ” ) disp ( ” As Net P r o f i t a b i l i t y I n d e x o f t h e p r o j e c t i s + ve . // i n Rs PV22 = CIF *2. // u n i t l e s s disp ( PV .751.11 Calculate internal rate of return 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 // Exa 11 clc .826. PV2 =0. // i n Rs // T o t a l P r e s e n t V a l u e 39 .LDR ) . 2 nd and 3 r d y e a r s CIF1 =5000. CIF2 =4000. // P r e s e n t v a l u e f o r a l l c a s h i n f l o w s P1 = CIF1 * PV1 . // g i v e n d a t a : // i n i t i a l c a s h o u t f l o w s ICO =10000. // a v e r a g e a n n u a l CIF CIF =( CIF1 + CIF2 + CIF3 ) /3. ” I n t e r n a l r a t e o f r e t u r n o f t h e p r o j e c t ( i n %) : ” ) Scilab code Exa 4. // i n Rs .interest 25 IRR = LDR +(( P1 .ICO ) /( P1 . // i n Rs . ” T r i a l PV f a c t o r i s : ” ) disp ( ” The r a t e o f r e t u r n a t t h i s PV i s a p p r o x i m a t e l y 10%” ) //P . // i n Rs P2 = CIF2 * PV2 . V f a c t o r a t 10% r a t e o f d i s c o u n t PV1 =0. // i n Rs . // i n % : Internal rate of return 26 disp ( IRR .909. // c a s h i n f l o w s o f 1 s t . CIF3 =3000. clear . // i n Rs .P2 ) ) *( HDR . // i n Rs // s t e p 1 : c a l c u l a t e f i r s t t r i a l r a t e PV = ICO / CIF . close . // i n Rs P3 = CIF3 * PV3 . PV3 =0. // i n Rs P2 = CIF2 * PV2 . PV2 =0. // i n Rs .712. i s more t h a n t h e c o s t o f investment .893. // i n Rs . // i n Rs P3 = CIF3 * PV3 . P r e s e n t v a l u e a t l o w e r r a t e o f interest P2 =9789. ” t o t a l p r e s e n t v a l u e o f c a s h i n f l o w s a t 10% 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 r a t e i s : ”) disp ( ” As t h e t o t a l p r e s e n t v a l u e o f c a s h i n f l o w s a t 10% r a t e i s 1 0 1 0 2 RS . Lower d i s c o u n t r a t e HDR =12.27 P = P1 + P2 + P3 . // i n Rs disp (P . PV3 =0.797.P2 ) ) *( HDR . ” I n t e r n a l r a t e o f r e t u r n o f t h e p r o j e c t ( i n %) : ” ) 40 . // i n % : Internal rate of return disp ( IRR .ICO ) /( P1 . P r e s e n t v a l u e a t h i g h e r r a t e o f interest IRR = LDR +(( P1 . H i g h e r d i s c o u n t r a t e P1 =10102. ”) disp ( ” The n e x t t r i a l r a t e can be t a k e n a s 12%. // i n % . // i n Rs // T o t a l P r e s e n t V a l u e P = P1 + P2 + P3 . V f a c t o r a t 12% r a t e o f d i s c o u n t PV1 =0. // P r e s e n t v a l u e f o r a l l c a s h i n f l o w s P1 = CIF1 * PV1 . i s l e s s t h a n t h e c o s t o f investment . ” ) //P . // i n Rs 28 disp (P . ”) // IRR w i l l be c a l c u l a t e d by i n t e r p o l a t i o n o f t h e s e two r a t e s LDR =10. // i n % . ” t o t a l p r e s e n t v a l u e o f c a s h i n f l o w s a t 12% r a t e i s : ”) disp ( ” As t h e t o t a l p r e s e n t v a l u e o f c a s h i n f l o w s a t 12% r a t e i s 9 7 8 9 RS .LDR ) . 3 rd . CIF2 =40000. // i n Rs P5 = CIF5 * PV5 . // i n Rs .301. PV3 =0.364. 41 . // g i v e n d a t a : // i n i t i a l c a s h o u t f l o w s ICO =70000.406. // i n Rs P4 = CIF4 * PV4 . V f a c t o r a t 35% r a t e o f d i s c o u n t PV1 =0.Scilab code Exa 4. CIF5 =10000. // P r e s e n t v a l u e f o r a l l c a s h i n f l o w s P1 = CIF1 * PV1 . CIF4 =10000.714. PV4 =0. close . // i n Rs . V f a c t o r a t 40% r a t e o f d i s c o u n t PV1 =0. CIF3 =20000. // i n Rs disp (P .12 Discuss according to internal rate of return 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 // Exa 12 clc . // i n Rs .549. // i n Rs P2 = CIF2 * PV2 . ” T o t a l p r e s e n t v a l u e ( i n Rs ) i s : ” ) disp ( ” As t h e t o t a l p r e s e n t v a l u e o f c a s h i n f l o w s a t 35% r a t e i s 7 2 3 7 0 RS . // i n Rs P3 = CIF3 * PV3 . // i n Rs // T o t a l P r e s e n t V a l u e P = P1 + P2 + P3 + P4 + P5 .741. PV3 =0. PV2 =0. ”) disp ( ” The n e x t t r i a l r a t e can be t a k e n a s 40%.510. PV2 =0. // i n Rs . i s more t h a n t h e c o s t o f investment . ” ) //P . // i n Rs .223. clear . PV5 =0. // c a s h i n f l o w s o f 1 s t . 4 t h and 5 t h y e a r s CIF1 =50000. // i n Rs . 2 nd . //P . ”) // IRR w i l l be c a l c u l a t e d by i n t e r p o l a t i o n o f t h e s e two r a t e s LDR =35. // i n Rs . 42 . PV5 =0. ” T o t a l p r e s e n t v a l u e ( i n Rs ) i s : ” ) disp ( ” As t h e t o t a l p r e s e n t v a l u e o f c a s h i n f l o w s a t 40% r a t e i s 6 7 8 4 0 RS .LDR ) . // i n Rs P3 = CIF3 * PV3 . // i n Rs P5 = CIF5 * PV5 . // i n Rs .186. // i n Rs // T o t a l P r e s e n t V a l u e P = P1 + P2 + P3 + P4 + P5 .260. // i n % . Lower d i s c o u n t r a t e HDR =40. P r o j e c t s h o u l d be a c e p t e d .1 Calculate payback period 1 // Exa 1 3 .ICO ) /( P1 . // i n % : Internal rate of return disp ( IRR .13.P2 ) ) *( HDR .35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 PV4 =0. P r e s e n t v a l u e a t h i g h e r r a t e o f interest IRR = LDR +(( P1 . P r e s e n t v a l u e a t l o w e r r a t e o f interest P2 =67840. H i g h e r d i s c o u n t r a t e P1 =72370. // i n % . // P r e s e n t v a l u e f o r a l l c a s h i n f l o w s P1 = CIF1 * PV1 . ” I n t e r n a l r a t e o f r e t u r n o f t h e p r o j e c t ( i n %) : ” ) // Minimum d e s i r e d r a t e o f r e t u r n f i x e d by management i s 25% disp ( ” As t h e c a l c u l a t e d IRR i s g r e a t e r t h a n t h e minimum f i x e d r a t e . // i n Rs P2 = CIF2 * PV2 . 1 2 clc . ” ) Scilab code Exa 4. // i n Rs P4 = CIF4 * PV4 . i s l e s s t h a n t h e c o s t o f investment . // i n Rs disp (P . 14 CIF6 =16000. // i n Rs . // i n Rs . // i n Rs . // i n Rs . 27 CumCIF8 =136000. 17 CIF9 =20000. // i n Rs . 10 CIF2 =14000. // i n Rs . // c a s h f l o w o f l a s t payback y e a r PaybackPeriod = E + B / C . 1 0 0 0 0 i s l e f t out o f i n i t i a l investment . // i n Rs . 23 CumCIF4 =560000. // i n Rs . 12 CIF4 =14000. 30 disp ( ” I n t h e t a b l e i t can be s e e n t h a t i n 5 y e a r s 31 32 33 34 35 36 7 0 0 0 0 Rs h a s b e e n r e c o v e r e d . 22 CumCIF3 =42000. ” Payback p e r i o d o f t h e p r o j e c t ( i n y e a r s ) i s : ”).3 clear . // i n Rs . // i n Rs . 13 CIF5 =14000. 26 CumCIF7 =106000. 18 CIF10 =8000. 21 CumCIF2 =28000. // r e m a i n i n g b a l a n c e t o be r e c o v e r e d C =16000. // i n Rs . // i n Rs . 29 CumCIF10 =164000. 16 CIF8 =30000. ”) disp ( ” Payback p e r i o d i s b e t w e e n 5 and 6 y e a r s . // i n Rs . 5 // g i v e n d a t a : 6 // i n i t i a l c a s h o u t f l o w s 7 ICO =80000. // i n Rs . // i n Rs . 11 CIF3 =14000. 43 . ” ) E =5. // i n Rs . 4 close . // i n Rs . 15 CIF7 =20000. 24 CumCIF5 =70000. // i n Rs . // i n Rs . 28 CumCIF9 =156000. 19 // Cummulative c a s h i n f l o w s o f 10 y e a r s 20 CumCIF1 =14000. disp ( PaybackPeriod . B =80000 -70000. // i n Rs . Rs . 8 // c a s h i n f l o w s o f 10 y e a r s 9 CIF1 =14000. // i n Rs . 25 CumCIF6 =86000. 2 Calculate average rate of return 1 // Exa 1 3 . 2 2 clc . // i n Rs . 27 CumCIF8 =136000. 32 // A v e r a g e D e p r e c i a t i o n p e r annum 44 . 4 close . // i n Rs . 14 CIF6 =16000. 21 CumCIF2 =28000. // i n Rs . // i n Rs . // i n Rs . // i n Rs . // i n Rs . 23 CumCIF4 =560000. // i n Rs . // i n Rs . 8 // c a s h i n f l o w s o f 10 y e a r s 9 CIF1 =14000. 12 CIF4 =14000. // i n Rs . 30 // a v e r a g e a n n u a l CIF 31 AvgCIF = CumCIF10 /10. 10 CIF2 =14000. // i n Rs . 29 CumCIF10 =164000. 3 clear . // i n Rs . 18 CIF10 =8000. 26 CumCIF7 =106000. // i n Rs . // i n Rs . // i n Rs . 24 CumCIF5 =70000. 17 CIF9 =20000. 19 // Cummulative c a s h i n f l o w s o f 10 y e a r s 20 CumCIF1 =14000. // i n Rs . // i n Rs . 28 CumCIF9 =156000. 16 CIF8 =30000. 22 CumCIF3 =42000.Scilab code Exa 4. // i n Rs . // i n Rs . 25 CumCIF6 =86000. 11 CIF3 =14000. 15 CIF7 =20000. // i n Rs . // i n Rs . 13 CIF5 =14000.13. 5 // g i v e n d a t a : 6 // i n i t i a l c a s h o u t f l o w s 7 ICO =80000. 45 . // i n Rs . // i n Rs // A v e r a g e i n v e s t m e n t AvgInv =( ICO + ScrapValue ) /2. // i n Rs . // i n Rs . 17 CIF9 =20000. 8 // c a s h i n f l o w s o f 10 y e a r s 9 CIF1 =14000. 13 CIF5 =14000. // i n % 38 disp ( ARR . 11 CIF3 =14000. 18 CIF10 =8000. 10 CIF2 =14000. // i n Rs .ScrapValue ) /10. ADep =( ICO . 12 CIF4 =14000. // i n Rs .AvgD ) / AvgINV ) *100. // i n Rs Scilab code Exa 4. // i n Rs // Annual D e p r e c i a t i o n ScrapValue =0. 4 close . 16 CIF8 =30000. 14 CIF6 =16000.3 Calculate Net present value 1 // Exa 1 3 . // i n Rs . // i n Rs . // i n Rs . 5 // g i v e n d a t a : 6 // i n i t i a l c a s h o u t f l o w s 7 ICO =80000. 15 CIF7 =20000. 3 clear . // i n Rs . // i n Rs 36 // C a l c u l a t i o n o f a v e r a g e r a t e o f r e t u r n 37 ARR =(( AvgCIF . // i n Rs . // i n Rs . 3 2 clc . ” A v e r a g e r a t e o f r e t u r n o f t h e p r o j e c t ( i n % 39 40 41 42 43 44 45 ) i s : ”) // A v e r a g e a n n u a l c a s h i n f l o w AvgCIF = CIF10 /10.13.33 AvgD = ICO /10. 34 // a v e r a g e i n v e s t m e t 35 AvgINV =40000. PV4 =0. // i n Rs P4 = CIF4 * PV4 .909. // i n Rs P7 = CIF7 * PV7 . PV8 =0.564. V f a c t o r a t 10% r a t e o f d i s c o u n t PV1 =0.13. // P r e s e n t v a l u e f o r a l l c a s h i n f l o w s P1 = CIF1 * PV1 .424.826.683.621. // i n Rs disp (P . PV7 =0. 4 2 clc . PV3 =0.751. // i n Rs P10 = CIF10 * PV10 . 46 . PV5 =0. // i n Rs P9 = CIF9 * PV9 . // i n Rs P6 = CIF6 * PV6 .386. PV2 =0.19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 //P . // i n Rs P8 = CIF8 * PV8 . // i n Rs // T o t a l P r e s e n t V a l u e P = P1 + P2 + P3 + P4 + P5 + P6 + P7 + P8 + P9 + P10 . ” T o t a l p r e s e n t v a l u e ( i n Rs ) i s : ” ) // Net P r e s e n t V a l u e a t 10% d i s c o u n t r a t e NPV =P .ICO . // i n Rs P5 = CIF5 * PV5 . // i n Rs disp ( NPV . // i n Rs P3 = CIF3 * PV3 .513.4 Calculate profitability index 1 // Exa 1 3 . ” Net P r e s e n t V a l u e a t 10% d i s c o u n t r a t e i s : ”) Scilab code Exa 4.467. PV9 =0. 3 clear . // i n Rs P2 = CIF2 * PV2 . PV6 =0. PV10 =0. 13 CIF5 =14000. 47 o f 10 y e a r s rate is . // i n Rs . // i n Rs . 12 CIF4 =14000. // i n Rs . 15 CIF7 =20000. // i n Rs . // u n i t l e s s 13 disp ( PI . ” T o t a l p r e s e n t v a l u e ( i n Rs ) i s : ” ) 11 // P r o f i t a b i l i t y I n d e x a t 10% d i s c o u n t r a t e 12 PI = P / ICO . // i n Rs . // i n Rs 10 disp (P . // i n Rs . 5 2 clc . ” P r o f i t a b i l i t y I n d e x a t 10% d i s c o u n t : ”) Scilab code Exa 4. // i n Rs . 14 CIF6 =16000. // i n Rs . 8 // T o t a l P r e s e n t V a l u e c a l c u l a t e d i n Exa13 .5 Calculate internal rate of return 1 // Exa 1 3 . // i n Rs . // i n Rs . 16 CIF8 =30000. 18 CIF10 =8000. 3 clear . 11 CIF3 =14000. 21 CumCIF2 =28000. 5 // g i v e n d a t a : 6 // i n i t i a l c a s h o u t f l o w s 7 ICO =80000. // i n Rs . 3 9 P =97922. // i n Rs . 19 // Cummulative c a s h i n f l o w s 20 CumCIF1 =14000. // i n Rs . 17 CIF9 =20000. 5 // g i v e n d a t a : 6 // i n i t i a l c a s h o u t f l o w s 7 ICO =80000.4 close . 10 CIF2 =14000. 8 // c a s h i n f l o w s o f 10 y e a r s 9 CIF1 =14000. 4 close . // i n Rs .13. PV6 =0. Lower d i s c o u n t r a t e HDR =15. // i n Rs P5 = CIF5 * PV5 . PV7 =0. PV2 =0. // i n Rs . PV3 =0. // i n Rs P3 = CIF3 * PV3 . CumCIF8 =136000. ” T o t a l p r e s e n t v a l u e ( i n Rs ) i s : ” ) // IRR By i n t e r p o l a t i o n LDR =10. // i n % . CumCIF9 =156000. PV4 =0. CumCIF5 =70000. // i n Rs P10 = CIF10 * PV10 . // i n Rs // T o t a l P r e s e n t V a l u e P = P1 + P2 + P3 + P4 + P5 + P6 + P7 + P8 + P9 + P10 . PV9 =0. // i n Rs . // i n Rs P8 = CIF8 * PV8 . PV5 =0. // i n Rs .327. // i n Rs disp (P . CumCIF7 =106000. // i n % . // i n Rs P6 = CIF6 * PV6 . // i n Rs . CumCIF4 =560000. // i n Rs . // P r e s e n t v a l u e f o r a l l c a s h i n f l o w s P1 = CIF1 * PV1 .22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 CumCIF3 =42000. P r e s e n t v a l u e a t l o w e r r a t e o f interest 48 .284. PV10 =0. // i n Rs . // i n Rs P2 = CIF2 * PV2 .376. CumCIF6 =86000.572.756. // i n Rs P4 = CIF4 * PV4 . // i n Rs P9 = CIF9 * PV9 .658.432.870. // i n Rs . //P . // i n Rs . H i g h e r d i s c o u n t r a t e P1 =97922. PV8 =0. CumCIF10 =164000. V f a c t o r a t 15% r a t e o f d i s c o u n t PV1 =0.247.497. // i n Rs . // i n Rs P7 = CIF7 * PV7 . IBT4 = CBFT4 . // i n Rs . // Net i n c o m e a f t e r Tax ( 5 5%) and d e p r e c i a t i o n 49 .59 P2 =78840.D . CBFT4 =15000. IBT2 = CBFT2 . // Income b e f o r e t a x a f t e r d e p r e c i a t i o n IBT1 = CBFT1 . // i n i t i a l i n v e s t m e n t i n Rs . // i n Rs .1 Compute payback period 1 // Exa 1 4 ( i ) 2 clc . // i n % 10 // d e p r e c i a t i o n t y p e : S t r a i g h t l i n e 11 D = inINV / life .14.ICO ) /( P1 . // i n Rs 12 // c a s h f l o w s b e f o r e t a x o f 1 s t . // i n Rs . 4 t h and 5 t h 13 14 15 16 17 18 19 20 21 22 23 24 years CBFT1 =10000. // i n Rs .D .D . CBFT3 =14000. ” I n t e r n a l r a t e o f r e t u r n o f t h e p r o j e c t ( i n %) : ” ) Scilab code Exa 4. // i n Rs . 3 rd . CBFT2 =11000. // i n Rs . // i n % : 61 Internal rate of return disp ( IRR . and e q u a l for all projects 7 life =5.D . // i n Rs . // i n y e a r s 8 salvage =0. // i n Rs . // i n Rs .D . // i n Rs . 4 close . // i n Rs .LDR ) . Present value at higher rate of interest 60 IRR = LDR +(( P1 . 9 TaxRate =55. 3 clear . IBT3 = CBFT3 . // i n Rs . CBFT5 =25000. 2 nd . 5 // g i v e n d a t a : 6 inINV =50000.P2 ) ) *( HDR . IBT5 = CBFT5 . 3 rd . 2 nd . // i n Rs IATD3 = IBT3 -( IBT3 *55) /100. // i n RS ACI5 = IATD5 + D . // i n Rs // A v e r a g e a n n u a l i n c o m e a f t e r t a x and d e p r e c i a t i o n IATD =( IATD1 + IATD2 + IATD3 + IATD4 + IATD5 ) /5. ” P a r t ( i ) Payback p e r i o d o f t h e p r o j e c t ( i n y e a r s ) i s : ”). CumCIF5 = ACI1 + ACI2 + ACI3 + ACI4 + ACI5 . // i n Rs . // p a r t ( i ) c a l c u l a t i o n o f payback p e r i o d disp ( ” I n t h e c o m p u t a t i o n i t can be s e e n t h a t i n 4 y e a r s 4 4 5 0 0 Rs h a s b e e n r e c o v e r e d . 4 t h and 5 t h y e a r s CumCIF1 = ACI1 . ” ) E =4. // r e m a i n i n g b a l a n c e t o be r e c o v e r e d C =16750. // i n Rs . disp ( PaybackPeriod . Scilab code Exa 4.14. ”) disp ( ” Payback p e r i o d i s b e t w e e n 4 and 5 y e a r s . CumCIF2 = ACI1 + ACI2 .25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 IATD1 = IBT1 -( IBT1 *55) /100. // i n RS ACI4 = IATD4 + D . // i n Rs . CumCIF3 = ACI1 + ACI2 + ACI3 . 5 5 0 0 i s l e f t out o f i n i t i a l investment . // c a s h f l o w o f l a s t payback y e a r PaybackPeriod = E + B / C . // i n Rs IATD4 = IBT4 -( IBT4 *55) /100. // i n RS ACI2 = IATD2 + D . // i n RS // P r o j e c t A : Cummulative c a s h i n f l o w s o f 1 s t . // i n RS ACI3 = IATD3 + D . // i n Rs . CumCIF4 = ACI1 + ACI2 + ACI3 + ACI4 . // i n Rs IATD2 = IBT2 -( IBT2 *55) /100. // A v e r a g e I n v e s t m e n t AvgInv =( inINV + salvage ) /2. // i n Rs . // i n Rs // Annual c a s h i n f l o w s ACI1 = IATD1 + D .2 Compute average rate of return 50 . // i n Rs . // i n Rs IATD5 = IBT5 -( IBT5 *55) /100. B =50000 -44500. Rs . // i n Rs . 3 rd . // i n Rs 12 // c a s h f l o w s b e f o r e t a x o f 1 s t . // i n Rs // A v e r a g e a n n u a l i n c o m e a f t e r t a x and d e p r e c i a t i o n IATD =( IATD1 + IATD2 + IATD3 + IATD4 + IATD5 ) /5.D . 5 // g i v e n d a t a : 6 inINV =50000. // i n Rs . // i n Rs // Annual c a s h i n f l o w s ACI1 = IATD1 + D .1 // Exa 1 4 ( i i ) 2 clc . IBT3 = CBFT3 . // i n Rs . // i n Rs IATD3 = IBT3 -( IBT3 *55) /100. // i n % 10 // d e p r e c i a t i o n t y p e : S t r a i g h t l i n e 11 D = inINV / life . CBFT3 =14000. // i n Rs IATD5 = IBT5 -( IBT5 *55) /100. // i n Rs .D . // i n i t i a l i n v e s t m e n t i n Rs . // i n Rs . // i n Rs . // Net i n c o m e a f t e r Tax ( 5 5%) and d e p r e c i a t i o n IATD1 = IBT1 -( IBT1 *55) /100. // i n RS ACI2 = IATD2 + D . // i n Rs . and e q u a l for all projects 7 life =5.D . // i n Rs IATD4 = IBT4 -( IBT4 *55) /100. // Income b e f o r e t a x a f t e r d e p r e c i a t i o n IBT1 = CBFT1 . 3 clear .D . // i n Rs . // i n Rs . // i n Rs . // i n Rs IATD2 = IBT2 -( IBT2 *55) /100. CBFT5 =25000. 2 nd . // A v e r a g e I n v e s t m e n t AvgInv =( inINV + salvage ) /2. // i n Rs . CBFT2 =11000. 9 TaxRate =55. IBT4 = CBFT4 . IBT5 = CBFT5 . IBT2 = CBFT2 . 4 close . CBFT4 =15000. // i n y e a r s 8 salvage =0. // i n RS 51 .D . // i n Rs . 4 t h and 5 t h 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 years CBFT1 =10000. // i n RS // P r o j e c t A : Cummulative c a s h i n f l o w s o f 1 s t . CumCIF4 = ACI1 + ACI2 + ACI3 + ACI4 .3 Compute Net present value 1 // Exa 1 4 ( i i i ) 2 clc . 3 rd . ” P a r t ( i i ) A v e r a g e r a t e o f r e t u r n ( i n %) : ” ) Scilab code Exa 4. Rs . 3 clear . // p a r t ( i i ) c a l c u l a t i o n o f ARR ARR =( IATD / AvgInv ) *100.37 38 39 40 41 42 43 44 45 46 47 48 ACI3 = IATD3 + D . // i n Rs . 5 // g i v e n d a t a : 6 inINV =50000. // i n CBFT2 =11000. Rs . // i n Rs .14. // i n CBFT4 =15000. and e q u a l for all projects 7 life =5. // i n Rs . CumCIF5 = ACI1 + ACI2 + ACI3 + ACI4 + ACI5 . // i n CBFT3 =14000. // i n % 10 // d e p r e c i a t i o n t y p e : S t r a i g h t l i n e 11 D = inINV / life . 2 nd . CumCIF2 = ACI1 + ACI2 . 9 TaxRate =55. 3 rd . // i n Rs . CumCIF3 = ACI1 + ACI2 + ACI3 . // i n y e a r s 8 salvage =0. // i n Rs 12 // c a s h f l o w s b e f o r e t a x o f 1 s t . // i n Rs . // i n Rs . // i n % disp ( ARR . 4 t h and 5 t h 13 14 15 16 years CBFT1 =10000. // i n i t i a l i n v e s t m e n t i n Rs . 2 nd . 52 . // i n RS ACI5 = IATD5 + D . 4 close . Rs . // i n Rs . // i n RS ACI4 = IATD4 + D . 4 t h and 5 t h y e a r s CumCIF1 = ACI1 . // i n RS ACI4 = IATD4 + D . // i n Rs IATD3 = IBT3 -( IBT3 *55) /100. CumCIF2 = ACI1 + ACI2 . // i n Rs IATD5 = IBT5 -( IBT5 *55) /100. PV2 =0.909. // i n Rs . // i n Rs . // i n Rs // Annual c a s h i n f l o w s ACI1 = IATD1 + D . IBT5 = CBFT5 . CumCIF5 = ACI1 + ACI2 + ACI3 + ACI4 + ACI5 . // Net i n c o m e a f t e r Tax ( 5 5%) and d e p r e c i a t i o n IATD1 = IBT1 -( IBT1 *55) /100. // i n Rs . // i n RS // P r o j e c t A : Cummulative c a s h i n f l o w s o f 1 s t . // i n Rs IATD4 = IBT4 -( IBT4 *55) /100. IBT3 = CBFT3 . // A v e r a g e I n v e s t m e n t AvgInv =( inINV + salvage ) /2. // i n RS ACI5 = IATD5 + D .D . PV3 =0. 4 t h and 5 t h y e a r s CumCIF1 = ACI1 . // i n Rs .D . // p a r t ( i i i ) c a l c u l a t i o n o f Net P r e s e n t v a l u e //PV a t 10% //P . // Income b e f o r e t a x a f t e r d e p r e c i a t i o n IBT1 = CBFT1 . // i n Rs . PV4 =0. // i n RS ACI3 = IATD3 + D . IBT4 = CBFT4 .683. CumCIF3 = ACI1 + ACI2 + ACI3 . // i n Rs IATD2 = IBT2 -( IBT2 *55) /100. 2 nd . 3 rd . IBT2 = CBFT2 .826. // i n Rs . // i n Rs . 53 . // i n RS ACI2 = IATD2 + D . // i n Rs . // i n Rs // A v e r a g e a n n u a l i n c o m e a f t e r t a x and d e p r e c i a t i o n IATD =( IATD1 + IATD2 + IATD3 + IATD4 + IATD5 ) /5.751. // i n Rs . CumCIF4 = ACI1 + ACI2 + ACI3 + ACI4 . V f a c t o r a t 10% r a t e o f d i s c o u n t PV1 =0. // i n Rs . // i n Rs .D .D . // i n Rs .D .17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 CBFT5 =25000. // i n y e a r s salvage =0. CBFT5 =25000. // i n Rs . 4 close . // i n Rs P2 = ACI2 * PV2 .4 Calculate profitability index 1 // Exa 1 4 ( i v ) 2 clc . 4 t h and 5 t h years CBFT1 =10000. 54 .14. CBFT2 =11000. // i n Rs P4 = ACI4 * PV4 . 5 // g i v e n d a t a : 6 inINV =50000. ” P a r t ( i i i ) Net P r e s e n t V a l u e i s : ” ) Scilab code Exa 4. CBFT3 =14000. and e q u a l for all projects life =5. // i n Rs . // i n Rs // T o t a l P r e s e n t V a l u e P = P1 + P2 + P3 + P4 + P5 .621. // i n Rs P3 = ACI3 * PV3 . // i n Rs .inINV . 3 clear . // i n Rs // c a s h f l o w s b e f o r e t a x o f 1 s t . 55 // P r e s e n t v a l u e 56 57 58 59 60 61 62 63 64 65 f o r a l l c a s h i n f l o w s a t 10% d i s c o u n t Rate P1 = ACI1 * PV1 . // i n Rs disp ( NPV . 2 nd . // i n % // d e p r e c i a t i o n t y p e : S t r a i g h t l i n e D = inINV / life . // i n Rs P5 = ACI5 * PV5 . // i n Rs // Net P r e s e n t V a l u e NPV =P .54 PV5 =0. // i n Rs . CBFT4 =15000. TaxRate =55. // i n i t i a l 7 8 9 10 11 12 13 14 15 16 17 i n v e s t m e n t i n Rs . // i n Rs . // i n Rs . 3 rd . 5 Calculate internal rate of return 55 . 3 rd . IBT5 = CBFT5 . // i n Rs . IBT3 = CBFT3 . // i n Rs . // i n Rs // Annual c a s h i n f l o w s ACI1 = IATD1 + D . // i n Rs IATD3 = IBT3 -( IBT3 *55) /100. // i n Rs . // A v e r a g e I n v e s t m e n t AvgInv =( inINV + salvage ) /2. // i n Rs . CumCIF5 = ACI1 + ACI2 + ACI3 + ACI4 + ACI5 . Scilab code Exa 4. CumCIF2 = ACI1 + ACI2 . // i n RS ACI5 = IATD5 + D . ” P a r t ( i v ) P r o f i t a b i l i t y i n d e x a t 10% d i s c o u n t r a t e : ”). CumCIF4 = ACI1 + ACI2 + ACI3 + ACI4 . // i n Rs .D . // i n Rs . CumCIF3 = ACI1 + ACI2 + ACI3 .18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 // Income b e f o r e t a x a f t e r d e p r e c i a t i o n IBT1 = CBFT1 . // p a r t ( i v ) P r o f i t a b i l i t y i n d e x a t 10% d i s c o u n t r a t e PI = P / inINV . // i n Rs . // i n RS ACI3 = IATD3 + D . 2 nd .14.D . // i n RS ACI2 = IATD2 + D . // i n RS // P r o j e c t A : Cummulative c a s h i n f l o w s o f 1 s t . // i n Rs IATD4 = IBT4 -( IBT4 *55) /100. // i n Rs .D . // i n Rs . // u n i t l e s s disp ( PI . 4 t h and 5 t h y e a r s CumCIF1 = ACI1 . IBT2 = CBFT2 . // Net i n c o m e a f t e r Tax ( 5 5%) and d e p r e c i a t i o n IATD1 = IBT1 -( IBT1 *55) /100. // i n Rs . IBT4 = CBFT4 . // i n Rs . // i n Rs IATD5 = IBT5 -( IBT5 *55) /100.D .D . // i n RS ACI4 = IATD4 + D . // i n Rs // A v e r a g e a n n u a l i n c o m e a f t e r t a x and d e p r e c i a t i o n IATD =( IATD1 + IATD2 + IATD3 + IATD4 + IATD5 ) /5. // i n Rs IATD2 = IBT2 -( IBT2 *55) /100. // i n Rs 12 // c a s h f l o w s b e f o r e t a x o f 1 s t . // A v e r a g e I n v e s t m e n t AvgInv =( inINV + salvage ) /2. // i n Rs . 3 rd . // i n Rs . // i n Rs IATD5 = IBT5 -( IBT5 *55) /100. // i n Rs // A v e r a g e a n n u a l i n c o m e a f t e r t a x and d e p r e c i a t i o n IATD =( IATD1 + IATD2 + IATD3 + IATD4 + IATD5 ) /5. // i n RS 56 . // i n Rs .D . // i n Rs . // i n Rs . // i n Rs . CBFT3 =14000. IBT2 = CBFT2 .D . // i n Rs . // i n Rs . // i n Rs IATD3 = IBT3 -( IBT3 *55) /100. 4 close . IBT5 = CBFT5 . // i n RS ACI2 = IATD2 + D . IBT4 = CBFT4 . // i n y e a r s 8 salvage =0. // i n Rs .D . // i n Rs .D .D . 5 // g i v e n d a t a : 6 inINV =50000. // i n Rs // Annual c a s h i n f l o w s ACI1 = IATD1 + D . // i n % 10 // d e p r e c i a t i o n t y p e : S t r a i g h t l i n e 11 D = inINV / life . // i n Rs IATD2 = IBT2 -( IBT2 *55) /100. IBT3 = CBFT3 . // Income b e f o r e t a x a f t e r d e p r e c i a t i o n IBT1 = CBFT1 . // i n i t i a l i n v e s t m e n t i n Rs . // Net i n c o m e a f t e r Tax ( 5 5%) and d e p r e c i a t i o n IATD1 = IBT1 -( IBT1 *55) /100. // i n Rs IATD4 = IBT4 -( IBT4 *55) /100. 2 nd . 4 t h and 5 t h 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 years CBFT1 =10000. and e q u a l for all projects 7 life =5. CBFT2 =11000. 3 clear . // i n Rs . CBFT5 =25000. CBFT4 =15000.1 // Exa 1 4 ( v ) 2 clc . // i n Rs . 9 TaxRate =55. 857. 4 t h and 5 t h y e a r s CumCIF1 = ACI1 . // i n Rs P5 = ACI5 * PV5 . CumCIF4 = ACI1 + ACI2 + ACI3 + ACI4 . ” ) disp ( ” As t h e t o t a l p r e s e n t v a l u e o f c a s h i n f l o w s a t 8% r a t e i s 4 7 9 9 6 RS . // i n Rs . // i n Rs P4 = ACI4 * PV4 . 2 nd . CumCIF3 = ACI1 + ACI2 + ACI3 . ” ) //PV a t 8% //P . CumCIF2 = ACI1 + ACI2 . ”) disp ( ” The n e x t t r i a l r a t e can be t a k e n a s 6%. // i n Rs // T o t a l P r e s e n t V a l u e P = P1 + P2 + P3 + P4 + P5 . V f a c t o r a t 6% r a t e o f d i s c o u n t 57 . PV4 =0. ”) disp ( ” The n e x t t r i a l r a t e can be t a k e n a s 8%. V f a c t o r a t 8% r a t e o f d i s c o u n t PV1 =0. // i n Rs . // i n Rs . // i n RS ACI4 = IATD4 + D . // i n Rs P3 = ACI3 * PV3 . // i n Rs disp (P . i s l e s s t h a n t h e c o s t o f investment . CumCIF5 = ACI1 + ACI2 + ACI3 + ACI4 + ACI5 .926.681. // P r e s e n t v a l u e f o r a l l c a s h i n f l o w s a t 8% d i s c o u n t Rate P1 = ACI1 * PV1 . 3 rd .794. // i n Rs .735. PV5 =0. // i n Rs . // p a r t ( v ) I n t e r n a l Rate o f r e t u r n disp ( ” As t h e t o t a l p r e s e n t v a l u e o f c a s h i n f l o w s a t 10% r a t e i s 4 5 3 5 2 RS . // i n Rs P2 = ACI2 * PV2 . // i n RS ACI5 = IATD5 + D .37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 ACI3 = IATD3 + D . ” ) //PV a t 6% //P . PV3 =0. // i n RS // P r o j e c t A : Cummulative c a s h i n f l o w s o f 1 s t . ” T o t a l P r e s e n t V a l u e a t 8% d i s c o u n t r a t e . PV2 =0. i s l e s s t h a n t h e c o s t o f investment . PV5 =0. ”) // IRR w i l l be c a l c u l a t e d by i n t e r p o l a t i o n o f t h e s e two r a t e s 6% and 8% LDR =6. // i n Rs disp ( ” As t h e t o t a l p r e s e n t v a l u e o f c a s h i n f l o w s a t 6% r a t e i s 5 0 8 5 7 RS . P r e s e n t v a l u e a t h i g h e r r a t e o f interest IRR = LDR +(( P1 . // P r e s e n t v a l u e f o r a l l c a s h i n f l o w s a t 6% d i s c o u n t Rate P1 = ACI1 * PV1 . i s more t h a n t h e c o s t o f investment .792. P r e s e n t v a l u e a t l o w e r r a t e o f interest P2 =47996.inINV ) /( P1 .69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 PV1 =0. ” P a r t ( v ) I n t e r n a l r a t e o f r e t u r n o f t h e p r o j e c t ( i n %) : ” ) 58 .890.LDR ) .840. // i n Rs .943. // i n % . H i g h e r d i s c o u n t r a t e P1 =50857. // i n Rs P5 = ACI5 * PV5 . // i n Rs // T o t a l P r e s e n t V a l u e P = P1 + P2 + P3 + P4 + P5 . // i n Rs P3 = ACI3 * PV3 . // i n % . PV4 =0. // i n % : Internal rate of return disp ( IRR . // i n Rs P4 = ACI4 * PV4 .P2 ) ) *( HDR . PV2 =0. Lower d i s c o u n t r a t e HDR =8. // i n Rs P2 = ACI2 * PV2 .747. // i n Rs . PV3 =0. end // c a l c u l a t i n g p r e s e n t worth o f s c r a p v a l u e 59 . for i =1:30 PWbenefits1 = PWbenefits1 + B /(1+ Irate /100) ^ i . 4 close . // i n Rupees life =30. // i n Rupees 7 OMC =65000. // i n y e a r s Irate =8. // i n Rupees ( a n n u a l c o s t 8 9 10 11 12 13 14 15 16 17 18 19 f o r o p e r a t i n g and maintenance ) B =225000. 3 clear . // i n Rupees ( a n n u a l s a v i n g and b e n e f i t s ScrapValue =300000. 5 // g i v e n d a t a : 6 IC =1500000. // i n % // // u s i n g p r e s e n t worth // // // c a l c u l a t i n g p r e s e n t worth o f s a v i n g s PWbenefits1 =0.2 Demonstrate use of annual present and future worth operation 1 // Exa 2 2 clc .Chapter 5 Analysis of public projects Scilab code Exa 5. // same t h e i n i t i a l c o s t // c a l c u l a t i n g p r e s e n t worth o f o p e r a t i n g and maintenance c o s t PWcost2 =0.i ) . PWbenefits = PWbenefits1 + PWbenefits2 . for i =1:30 60 . for i =1:30 PWcost2 = PWcost2 + OMC /(1+ Irate /100) ^ i . ” P r e s n t worth o f t h e b e n e f i t s ” ) . // t h e i n i t i a l c o s t // c a l c u l a t i n g f u t u r e worth o f o p e r a t i n g and maintenance c o s t FWcost2 =0. BCratio = PWbenefits / PWcost . 41 end 42 // c a l c u l a t i n g f u t u r e worth o f s c r a p v a l u e 43 44 FWbenefits2 = ScrapValue .20 21 22 23 24 25 26 27 28 29 30 PWbenefits2 = B /(1+ Irate /100) ^ life . end PWcost = PWcost1 + PWcost2 . ” F u t u r e worth o f t h e b e n e f i t s ” ) . // c a l c u l a t i n g F u t u r e worth o f c o s t FWcost1 = IC *(1+ Irate /100) ^ life . // t o t a l 46 47 48 49 50 51 future worth o f b e n e f i t s disp ( FWbenefits . 45 FWbenefits = FWbenefits1 + FWbenefits2 . // t o t a l p r e s e n t worth o f cost disp ( PWcost . // t o t a l p r e s e n t worth o f b e n e f i t s disp ( PWbenefits . ” B C r a t i o u s i n g p r e s e n t worth i s : ” ) 31 32 33 34 35 36 // // u s i n g f u t u r e worth // // 37 // c a l c u l a t i n g f u t u r e worth o f s a v i n g s 38 FWbenefits1 =0. // c a l c u l a t i n g p r e s e n t worth o f c o s t PWcost1 = IC . ” P r e s n t worth o f t h e c o s t ” ) . 39 for i =1:30 40 FWbenefits1 = FWbenefits1 + B *(1+ Irate /100) ^( life . // f o r m u l a disp ( BCratio . // t o t a l Annual 70 71 72 73 74 75 76 77 78 79 80 81 82 83 worth o f b e n e f i t s disp ( AWbenefits . BCratio = AWbenefits / AWcost . // t o t a l f u t u r e worth o f c o s t 55 disp ( FWcost . ” B C r a t i o u s i n g f u t u r e worth i s : ” ) 58 59 60 // // u s i n g a n n u a l worth // // 61 // c a l c u l a t i n g a n n u a l worth o f s a v i n g s 62 AWbenefits1 =0. // t o t a l a n n u a l worth o f c o s t disp ( AWcost . ” B C r a t i o u s i n g Annual worth i s : ” ) disp ( ” I t can be s e e n t h a t B/C r a t i o i s same . for i =1:30 AWcost2 = AWcost2 + OMC *(1+ Irate /100) ^( life . end AWcost = AWcost1 + AWcost2 . ” Annual worth o f t h e b e n e f i t s ” ) . 69 AWbenefits = AWbenefits1 + AWbenefits2 .52 FWcost2 = FWcost2 + OMC *(1+ Irate /100) ^( life . // t h e i n i t i a l c o s t // c a l c u l a t i n g a n n u a l worth o f o p e r a t i n g and maintenance c o s t AWcost2 =0. 65 end 66 // c a l c u l a t i n g a n n u a l worth o f s c r a p v a l u e 67 68 AWbenefits2 = ScrapValue . ” F u t u r e worth o f t h e c o s t ” ) . // c a l c u l a t i n g Annual worth o f c o s t AWcost1 = IC *(1+ Irate /100) ^ life . // f o r m u l a 57 disp ( BCratio . 53 end 54 FWcost = FWcost1 + FWcost2 .i ) . // f o r m u l a disp ( BCratio . 63 for i =1:30 64 AWbenefits1 = AWbenefits1 + B *(1+ Irate /100) ^( life .i ) .i ) . 56 BCratio = FWbenefits / FWcost . ” ) // Note : a n s w e r g i v e n i n t h e book i s n o t a s much a c c u r a t e a s c a l c u l a t e d by s c i l a b 61 . ” Annual worth o f t h e c o s t ” ) . // t o t a l p r e s e n t 21 22 23 24 25 26 27 28 29 worth o f b e n e f i t s disp ( PWbenefits . 5 // g i v e n d a t a : 6 IC =1500000. // same t h e i n i t i a l c o s t // c a l c u l a t i n g p r e s e n t worth o f o p e r a t i n g and maintenance c o s t PWcost2 =0. 14 for i =1:30 15 PWbenefits1 = PWbenefits1 + B /(1+ Irate /100) ^ i . 16 end 17 // c a l c u l a t i n g p r e s e n t worth o f s c r a p v a l u e 18 19 PWbenefits2 = B /(1+ Irate /100) ^ life . // i n Rupees 10 life =30. end PWcost = PWcost1 + PWcost2 . 20 PWbenefits = PWbenefits1 + PWbenefits2 . // t o t a l p r e s e n t worth o f 62 . // i n % 12 // c a l c u l a t i n g p r e s e n t worth o f s a v i n g s 13 PWbenefits1 =0. 4 close .3 Calculate the BC ratio 1 // Exa 3 2 clc . // i n Rupees ( a n n u a l s a v i n g and b e n e f i t s 9 ScrapValue =300000. // i n y e a r s 11 Irate =8. // i n Rupees 7 OMC =65000.Scilab code Exa 5. 3 clear . for i =1:30 PWcost2 = PWcost2 + OMC /(1+ Irate /100) ^ i . // i n Rupees ( a n n u a l c o s t f o r o p e r a t i n g and maintenance ) 8 B =225000. // c a l c u l a t i n g p r e s e n t worth o f c o s t PWcost1 = IC . ” P r e s n t worth o f t h e b e n e f i t s ” ) . // f o r m u l a disp ( BCratio .30 31 32 33 34 35 36 37 cost disp ( PWcost . // f o r m u l a disp ( BCratio . ” P r e s n t worth o f t h e c o s t ” ) . // // u s i n g c o n v e n t i o n a l B/C r a t i o // // BCratio = PWbenefits / PWcost . ” B C r a t i o u s i n g c o n v e n t i o n a l method i s : ”) // // u s i n g m o d i f i e d B/C r a t i o // // BCratio =( PWbenefits . ” B C r a t i o u s i n g c o n v e n t i o n a l method i s : ”) 63 .PWcost2 ) / IC . // i n Rs . disp ( ” P r o c e s s a c c o u n t : ” ) . // i n U n i t s 13 CostPerUnit =( CostOfProduction -50*10^ -2* NLoss ) / 14 15 16 17 UnitsProduced . // i n U n i t s CostOfAbnormalLoss = AbnormalLoss * CostPerUnit . AbnormalLoss = ActualLoss . // i n P a i s e / u n i t 11 NLoss = Production * NormalLoss /100.NLoss . 3 clear . // i n Rs .NLoss . 4 close . // i n U n i t s 10 ScrapValue =50. 64 .Chapter 8 Product Process and Operation Costing Scilab code Exa 8. 8 NormalLoss =10 // i n % 9 ActualLoss =150. 5 // g i v e n d a t a : 6 Production =1000 // u n i t s 7 CostOfProduction =1850. ” + string ( CostOfProduction ) ) . // i n U n i t s 12 UnitsProduced = Production . disp ( ” P r o d u c t i o n i n U n i t s = ” + string ( Production ) + ” Amount i n Rs .1 Process account and Abnormal Loss Acount 1 // Exa1 2 clc . // i n Rs . 50% c o m p l e t e 11 WorkComplete31jan =1000 // u n i t s 12 13 disp ( ” Opening I n v e n t o r y o f work−i n −p r o c e s s E q u i v a l e n t U n i t s : ” + string ( WorkComplete *60/100) ) . 40% c o m p l e t e 7 WorkComplete =1800 // u n i t s 8 ProcessDuringMonth =20000. ” + string ( CostPerUnit *( Production . 5 // g i v e n d a t a : 6 //Work−i n −p r o c e s s on Jan 1 . disp ( ” T o t a l Amount i n Rs . disp ( ”By S c r a p V a l u e = ” + string ( AbnormalLoss ) + ” Amount i n Rs . disp ( ”By F i n i s h e d Goods = ” + string ( Production ActualLoss ) + ” Amount i n Rs . disp ( ”By C o s t i n g P r o f i t and L o s s A/ c ” + ” Amount i n Rs . // i n U n i t s 9 TransferedNextProcess =18000 // i n U n i t s 10 //Work−i n −p r o c e s s on Jan 3 1 . 65 . disp ( ”To P r o c e s s Account i n U n i t s = ” + string ( AbnormalLoss ) + ” Amount i n Rs . disp ( ” Abnormal L o s s Account : ” ) .ActualLoss ) ) ) . 4 close .18 19 20 21 22 23 24 25 disp ( ”By Normal L o s s = ” + string ( NLoss ) + ” Amount i n Rs . 3 clear .2 Equivalent Production 1 // Exa2 2 clc . disp ( ” ” ) . ” + string (25+75) ) . ” + string ( AbnormalLoss * ScrapValue *10^ -2+ NLoss * ScrapValue *10^ -2) ) . ” + string ( NLoss * ScrapValue *10^ -2) ) . ” + string ( CostPerUnit * AbnormalLoss ) ) . Scilab code Exa 8. ” + string ( AbnormalLoss * ScrapValue *10^ -2) ) . disp ( ”LESS : U n i t s n o t c o m p l e t e d ” + string ( WorkComplete31jan ) ) . 12 OverheadAmounted =10640. // i n Rs . // i n U n i t s 16 17 disp ( ” S t a t e m e n t o f P r o d u c t i o n : ” ) . 10 MaterialsPurchaseCost =37500. Material 66 Labour . 4 close .3 Calculation of effective production and process cost sheet 1 // Exa3 2 clc .14 15 16 17 18 19 disp ( ”No . 19 disp ( ” Units Overhead Incomplete Total ”). disp ( ” E q u i v a l e n t P r o d u c t i o n = 1080+19000+500 = 2 0 5 8 0 ”). // i n Rs .WorkComplete31jan ) ) . disp ( ” C l o s i n g s t o c k o f work−i n −p r o c e s s ” + string ( ProcessDuringMonth . 5 // g i v e n d a t a : 6 MaterialsCost =1800. disp ( ” 50% c o m p l e t e d d u r i n g t h e month = 500 ” ) . // i n Rs . 18 disp ( ” ( Given i n form o f t a b l e b e l o w ) ” ) . 7 LabourCost =1700. // i n Rs . 14 FinishedProduction =1250. disp ( ” U n i t s Put i n t o p r o c e s s ” + string ( ProcessDuringMonth ) ) . Scilab code Exa 8. // i n Rs . 9 TotalCost = MaterialsCost + LabourCost + Overhead . // i n Rs . // i n U n i t s 15 work_in_processInventory =250. 13 ActualMaterialCost =34250. // i n Rs . // i n Rs . o f u n i t s c o m p l e t e d d u r i n g t h e month : ” ) . 8 Overhead =500. 11 WagesAmounted =39900. 3 clear . 29. // i n Rs . disp ( ” C o s t o f o p e n i n g work−i n −p r o c e s s f o r c o m p l e t i o n (200 u n i t s ) ”).disp ( ” Opening I n v e n t o r y ( t o be c o m p l e t e d 60%) 200 60% 120 120 120 ” ) .06 6 3 . 67 . OverheadsToComplete =120*25. LabourC =150*30. disp ( ”LESS : C l o s i n g S t o c k 250 20% 50 ” ) .23. 8. LabourToComplete =120*30. // C o s t o f Work−i n −p r o c e s s 30 t h Jun ( 2 5 0 U n i t s ) MaterialC =200*25. // i n Rs . disp ( ” ” ) .23. MaterialsToComplete =120*25. // i n Rs . 22 disp ( ” 20 1420 1420 1420 ”). disp ( ” C u r r e n t C o s t p e r u n i t 25 28 29 30 31 32 33 34 35 36 37 38 39 40 100 30. // i n Rs . // i n Rs . CurrentProduction =(1250 -200) *63. 2 9 ”). 24 disp ( ” 23 25 40% disp ( ” 26 1370 1320 disp ( ” C u r r e n t C o s t 27 34250 39900 10640 ”). //Work−i n −p r o c e s s a s on 1 s t Jun WorkInJun =4000. 21 disp ( ” I n p u t 1300 100% 1300 1300 1300 ”). // i n Rs . // i n Rs . 1320 ”).23 100 ” ) . // i n Rs . Total = MaterialsToComplete + floor ( LabourToComplete ) + floor ( OverheadsToComplete ) . 06. // i n Rs . disp ( ” Labour 1700 ”). 84790 ”). disp ( ” Overhead : ” + string ( OverheadC ) ) .41 42 43 44 45 46 47 48 49 50 51 52 53 54 OverheadC =150*8. disp ( ” C o s t o f Work−i n −p r o c e s s 30 t h Jun ( 2 5 0 U n i t s ) : ”). disp ( ” Labour : ” + string ( LabourC ) ) . disp ( ” S t a t e m e n t o f P r o d u c t i o n : ” ) . disp ( ” Overhead 60 10640 disp ( ” 34250 ”). disp ( ” Opening Work−i n −P r o c e s s ” ) . 57 disp ( ” M a t e r i a l s 1300 58 disp ( ” Labour 59 39900 ”). disp ( ” M a t e r i a l : ” + string ( MaterialC ) ) . disp ( ” C o s t s f o r : ” ) . 88790 ”) 61 disp ( ”LESS : C l o s i n g work−i n −p r o c e s s ”). 68 250 . 55 disp ( ” Overhead 500 4000 ”). disp ( ” P a r t i c u l a r s Units completion Total Cost C o s t Per Unit ”). disp ( ” ” ) . 56 disp ( ” I n p u t added : ” ) . disp ( ” M a t e r i a l s 200 40% 1800 ”). disp ( ” P r o c e s s C o s t S h e e t ( Given i n T a b u l a r r form below ) : ”). disp ( ” ( Given i n form o f t a b l e b e l o w ) ” ) . 3 clear . 13 Overhead1 =3100. 0 0 ”). // i n Rs .4 Calculation of effective production and process account 1 // Exa4 2 clc . // i n Rs . 5 // g i v e n d a t a : 6 OpeningStock =10000. 65 disp ( ” C o s t o f P r o d u c t i o n 1250 100% 62. // i n Rs . // i n Rs . 60% 64 disp ( ” Overhead 4534 ”). // i n U n i t s 7 MaterialsCost =2250. disp ( ” Opening Work−i n −P r o c e s s 69 . 8 Wages =650. 60% 1209 4 3 . 16 disp ( ” 17 Units Materials Labour and Overhead ” ) . 10 UnitsIntroduced =40000.62 disp ( ” M a t e r i a l s 80% 63 disp ( ” Labour 5000 ”).44 ”) 10743 78047 Scilab code Exa 8. 4 close . // i n Rs . // i n Rs . // i n U n i t s 11 MaterialsCost1 =9250. 9 Overhead =400. 12 Wages1 =4600. 14 disp ( ” C a l c u l a t i o n o f E q u i v a l e n t P r o d u c t i o n ” ) 15 disp ( ” ( Given i n form o f t a b l e b e l o w ) ” ) . 1 0 ”).3. // i n Rs . 2 3 ”).15. // l e t l a b o u r 25% c o m p l e t e = L1 L1 =5000*0. disp ( ” U n i t s s t a r t e d and f i n i s h e d 20000 20000 20000 ”). disp ( ” T o t a l ” ) . // i n Rs // // c o s t o f f i n i s h e d g o o d s 70 . disp ( ” M a t e r i a l 100% c o m p l e t e l a b o u r and o v e r h e a d 25% ”) disp ( ” E f f e c t i v e U n i t s 50000 50000 35000 ”) disp ( ” ” ) . disp ( ” Wages 650 4600 5250 35000 0 . disp ( ” C l o s i n g work−i n −p r o c e s s 20000 20000 5000 ”).10. 1 5 ”). // T o t a l T1 T1 = M1 + L1 + O1 . disp ( ” Overhead 400 3100 3500 35000 0 . disp ( ” Element Opening C o s t C o s t put i n Total Cost Equivalent Production C o s t Per U n i t ” ) . // l e t Overhead 25% c o m p l e t e = O1 O1 =5000*0. disp ( ” 3300 16950 20250 0. // i n Rs . disp ( ” M a t e r i a l 2250 9250 11500 50000 0 . // i n Rs .48 ”) // V a l u a t i o n o f work−i n −p r o c e s s ( 2 0 0 0 0 U n i t s // l e t m a t e r i a l 100% c o m p l e t e = M1 M1 =20000*0.18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 10000 10000 10000 ”). disp ( ” C o s t o f E q u i v a l e n t U n i t s u n d e r t h e a v e r a g e c o s t method : ” ) . disp ( ” P a r t i c u l a r s amount Particulars amount ” ) . O2 =30000*0.34 8000 ( Output T r a n s f e r e d ) 71 115. disp ( ” Overhead 3100 ”). disp ( ” Wages 4600 ”). // i n Rs .30. 4 close . disp ( ” Opening s t o c k 3000 c o m p l e t e d and t r a n s f e r e d 14400 ” ). // i n Rs . disp ( ” P r o c e s s a c c o u n t : ” ) . 6 disp ( ” Cost per a r t i c l e Cost per Total Cost a r t i c l e Total Cost ”). Scilab code Exa 8. Labour L2 and Overgead O2 M2 =30000*0.5 Process accounts 1 // Exa5 2 clc . disp ( ” M a t e r i a l 9250 c l o s i n g s t o c k ( work−i n −p r o c e s s ) 5850 ”). 5 disp ( ” P r o c e s s No .40 41 42 43 44 45 46 47 48 49 50 51 52 53 // l e t m a t e r i a l M2. 3 clear . // i n Rs .00 ”) . // T o t a l T2 T2 = M2 + L2 + O2 . 1 ” ) . 2 Account 27600 ”). disp ( ” ” ) .15. 7 disp ( ”To m a t e r i a l s 62.50 15000 By P r o c e s s No . disp ( ” 20250 20250 ”). // i n Rs . 8 disp ( ”To Labour 33. L2 =30000*0.10. disp ( ” Cost per a r t i c l e Total Cost Cost per a r t i c l e Total Cost ”). disp ( ”To I n d i r e c t E x p e n s e s 8. 2 ” ) .9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 .00 27600 115. disp ( ”To D i r e c t E x p e n s e s 30. disp ( ”To D i r e c t E x p e n s e s 10. disp ( ”To Labour 83. 2 Account 270. disp ( ” P r o c e s s No . disp ( ” ” ) . disp ( ”To P r o c e s s No . 3 Account 270. 1 Account 115.33 2000 ”).83 2600 ”).00 64800 By F i n i s h e d S t o c k Account 320.33 2000 ”). disp ( ” ” ) . disp ( ” 270.00 27860 ”).84 5000 ”).00 72 .83 5000 ”). disp ( ” Cost per a r t i c l e Total Cost Cost per a r t i c l e Total Cost ”).00 7200 ”). disp ( ” P r o c e s s No . disp ( ”To Labour 25.00 76800 ”) disp ( ”To m a t e r i a l s 8.33 2000 ”). disp ( ” 115.00 27600 By P r o c e s s No . 3 ” ) . disp ( ”To I n d i r e c t E x p e n s e s 20. disp ( ”To P r o c e s s No .00 64800 ”) disp ( ”To m a t e r i a l s 20.00 64800 ”).00 84800 270. 00 Scilab code Exa 8. disp ( ” R e p a i r s t o M a c h i n e r y Rs . disp ( ” R e f i n i n g P r o c e s s Account ” ) .6 Various process account and finished stock account 1 // Exa6 2 clc . 29 disp ( ” 76800 320. 2500 25 ” ) .00 76800 ”). 6 4 6 .6000 ”). 10. 500 205400 500 205400 ”). Amount .25 320. 600 400 ” ) . 6 7 p e r t o n disp ( ” Steam disp ( ” F a c t o r y E x p e n s e s disp ( ” 15 16 17 disp ( ” ” ) . 3 clear .42 6. 27 disp ( ”To D i r e c t E x p e n s e s 2500 ”). 200000 11000 ”). 1320 ”). 4 close . 100 280 300 194000 ”). 600 ” ) . 6 disp ( ” P a r t i c u l a r s Tons Amount 12 13 14 Particulars disp ( ”To Copra Used By s a l e o f c o p r a r e s i d u e disp ( ” Labour By L o s s disp ( ” E l e c t r i c Power Sale of copra sacks disp ( ” Sundry M a t e i a l s Cost o f crude o i l ”). 28 disp ( ”To I n d i r e c t E x p e n s e s 1500 ”). disp ( ” P a r t i c u l a r s Tons 7 8 9 10 11 73 Tons 500 175 Amount” ) . 5 disp ( ” Copra C r u s h i n g P r o c e s s Account ” ) . 6 8 p e r t o n 248 194600 ”). 7 6 8 . disp ( ” R e p a i r s t o M a c h i n e r y 140 ” ) . disp ( ” ” ) . 660 ” ) . disp ( ” Labour 1500 c o s t o f f i n i s h e d o i l ”). 330 ” ) . disp ( ” ” ) . 2 202100 ”). 194000 6750 ”). 9 1 4 . 1000 5”). disp ( ” E l e c t r i c Power 240 Rs . disp ( ” Steam 450 ” ) . disp ( ” F a c t o r y E x p e n s e s 220 ” ) . disp ( ” F i n i s h e e d s t o c k a c c o u n t ” ) . disp ( ” 250 194600 250 198800 ”). 450 ” ) . disp ( ” Sundry M a t e i a l s Rs . disp ( ”To R e f i n i n g P r o c e s s 250 192050 By L o s s 2”). 360 250 300 300 2000 192050 ”). disp ( ”To f i n i s h i n g p r o c e s s 248 194600 To b a l a n c e a t Rs . disp ( ” F i n i s h i n g P r o c e s s Account ” ) . disp ( ” P a r t i c u l a r s Tons Amount Particulars Tons Amount” ) . disp ( ”To c o s t o f c a s k s 7500 ” ). disp ( ” 202100 74 . 198800 198800 ”). 2 p e r t o n disp ( ” R e p a i r s t o M a c h i n e r y disp ( ” Steam disp ( ” F a c t o r y E x p e n s e s disp ( ” Tons 300 45 Amount” ) .18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 Particulars disp ( ”To Copra o i l By s a l e o f by−p r o d u c t s disp ( ” Labour By L o s s disp ( ” E l e c t r i c Power c o s t o f r e f i n i n g o i l ”). disp ( ” Tons Amount Tons Amount” ) . 7 8 4 . 8 disp ( ” p e r u n i t Rupees Units 10000 300 units sold 9 10 11 12 13 14 15 16 a t 25 P a i s a / u n i t ” ) . 1 10000 By n o r m a l w a s t a g e 3% o f 1 0 0 0 0 75 ” ) . disp ( ” P r o c e s s B Account ” ) . 7 disp ( ”To u n i t s i s s u e d a t Rs . disp ( ”To l a b o u r By p r o c e s s B o u t p u t t r a n s f e r e d 16625 ”).202100 ”). 3 clear . Scilab code Exa 8. disp ( ”To s u n d r y m a t e r i a l s By Abnormal w a s t a g e 350 ” ) .7 Process account and Abnormal wastage and gain 1 // Exa7 2 clc . 5 disp ( ” P r o c e s s A Account ” ) . 4 close . 75 . 6 disp ( ” P a r t i c u l a r s Units Particulars Rupees ” ) . disp ( ”To D i r e c t E x p e n s e s disp ( ” 10000 1000 200 5000 9500 1050 ”). disp ( ”To P r o c e s s A ( o u t p u t r e c d . disp ( ” P a r t i c u l a r s Units Rupees Particulars Units Rupees ” ) . 17050 10000 17050 ”). ) 9500 16625 By n o r m a l w a s t a g e 5% o f 9 5 0 0 ” ) . disp ( ” ” ) . 6500 272 2009 8100 9100 36309 9100 . 1/ u n i t 728 ” ) . // C a l c u l a t i o n o f Abnormal w a s t a g e and Abnormal Gain // P r o c e s s A : CostOfAbnormalWastageA =16975*200/9700. disp ( ” P a r t i c u l a r s Units Rupees Particulars Units Rupees ” ) . disp ( ” P r o c e s s C Account ” ) . disp ( ” Abnormal g a i n s 75 225 ” ) disp ( ” 9575 27538 9575 27538 ”). disp ( ” 33 34 35 36309 ”).17 18 19 20 21 22 23 24 25 26 27 28 disp ( ” u n i t s s o l d a t 50 P a i s a / u n i t 475 238 ” ) . disp ( ”To wages 8000 ”). // i n Rupees 29 30 31 76 728 500 ” ) . disp ( ”To s u n d r y m a t e r i a l s disp ( ”To wages By Abnormal Wastage 1156 ”). disp ( ”To Abnormal E f f e c t i v e o r ” ) . disp ( ” 32 u n i t s s o l d a t Rs . ) 9100 27300 ”). disp ( ”To s u n d r y m a t e r i a l s 1500 By p r o c e s s ( o u t p u t t r a n s f . disp ( ” ” ) . disp ( ”To D i r e c t E x p e n s e s 1188 ”). ) 9100 27300 By n o r m a l w a s t a g e 8% o f 9 1 0 0 ” ) . disp ( ”To P r o c e s s B ( o u t p u t r e c d . disp ( ”To D i r e c t E x p e n s e s By f i n i s h e d s t o c k ( o u t p u t ) 34425 ”). 46 disp ( ” Units Amount Units Amount” ) . ” ) . 47 disp ( ”To P r o c e s s A 200 By s a l e s o f w a s t e d u n i t s : 200 ” ) . disp ( CostOfAbnormalWastageB . 272 1506 1506 ”). // i n Rupees disp ( CostOfAbnormalWastageA . ” P r o c e s s C : C o s t Of Abnormal Wastage i n Rs . ” P r o c e s s A : C o s t Of Abnormal Wastage i n Rs . ” P r o c e s s B : C o s t Of Abnormal Wastage i n Rs . disp ( ” Units Amount Units Amount” ) . 51 disp ( ” 350 1156 50 ” ) . ” ) . ” ) . disp ( ”Dr . disp ( ” Abnormal Gain Account ” ) . 55 disp ( ”To s h o r t f a l l i n n o r m a l w a s t a g e o f 75 52 53 54 77 . 50 disp ( ” By C o s t i n g P r o f i t & L o s s Account 1184 ”). disp ( ” ” ) . // i n Rupees // P r o c e s s C : CostOfAbnormalWastageC =35581*272/8372. 48 disp ( ”To P r o c e s s C 272 U n i t s o f A @ 25 p a i s a / u n i t 49 disp ( ” 272 u n i t s o f P r o c e s s C @ Rs . ” ) . disp ( ” Abnormal w a s t a g e a c c o u n t ” ) .36 37 38 39 40 41 42 43 44 45 // P r o c e s s B : CostOfAbnormalWastageB =27075*75/9025. disp ( CostOfAbnormalWastageC . disp ( ” ” ) . Cr . 1/ u n i t 322 ” ) . 2500 ”). Labour complete ) ”). I . Computation o f e q u i v a l e n t ” ) . 400 ” ) . 4 close . disp ( ”W. P I n v e n t o r y on 1 s t June ( 4 0% disp ( ” 400 60% 240 .8 Computation of Equivalent and analysis of Cost sheet 1 // Exa7 2 clc . 225 ” ) . disp ( ”Add : I n p u t 2600 2600 ). 57 disp ( ”To C o s t i n g P r o i t and L o s s Account 187 ” ) . disp ( ” disp ( ” Completed U n i t s disp ( ” (+) C l o s i n g work−i n −p r o c e s s disp ( ” disp ( ” ( −) Opening work−i n −p r o c e s s disp ( ”New U n i t s ( I n p u t ) disp ( ” ” ) . 2600 ”). 3 clear . 240 240 ” ) 2600 2600 ” . 5 disp ( ” 1 . 58 disp ( ” 225 225 ” ) . 500 ” ) .38 By P r o c e s s A 75 56 disp ( ” u n i t s @ 50 P a i s a / e a c h ” ) . Scilab code Exa 8. S t a t e m e n t o f p r o d u c t i o n 6 7 8 9 10 11 12 13 14 15 16 17 18 19 u n i t s f o r June 2 0 1 0 : ”). disp ( ” 2 . 3000 ”). disp ( ” ( i ) ” ) . disp ( ” 78 Units ”). disp ( ” Units Incomplete % Materials Overhead ” ) . P I n v e n t o r y on 30 t h June 500 40% 100 200 200 ” ) . e . 4 0% o f 400 u n i t s ) 3600 2 2 .25 ”) disp ( ” 37 38 39 8000 5 0 . disp ( ” ” ) . disp ( ” ” ) . disp ( ” 169580 63. disp ( ” M a t e r i a l s ( 1 6 0 u n i t s i . 4 0% o f 400 u n i t s ) 1000 6. disp ( ” Put i n p r o c e s s ” ) . ) Units U n i t Rs . 4 0% o f 400 u n i t s ) 3400 2 1 . disp ( ” Overhead 21280 2640 8 . disp ( ” T o t a l Amoount E q u i v a l e n t s Cost per ”). . ” ) disp ( ” M a t e r i a l s 68500 2740 2 5 . disp ( ” M a t e r i a l s ( 2 7 4 0 u n i t s ) 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 79 . 2 5 ”). . 0 0 ”). disp ( ” Labour 79800 2640 3 0 . I .29 ”) disp ( ” ” ) . disp ( ” 3 . disp ( ” L e s s : W. disp ( ” 2500 2740 2640 2640 ” ). 5 0 ”). 2 3 ”). disp ( ” S t a t e m e n t o f c o s t p e r u n i t ” ) . disp ( ” Amount per u n i t ”). e . . e . disp ( ” ( Rs .36 3000 20% 2840 2840 2840 ” ). 0 6 ”). 0 0 ”). disp ( ” Labour ( 1 6 0 u n i t s i . P r o c e s s c o s t f o r t h e month o f June 2 0 1 0 ” ) . disp ( ” Overhead ( 1 6 0 u n i t s i . disp ( ” C o s t o f 400 u n i t s 23186 ” ). disp ( ” Total 177580 ”). disp ( ” Wages ( 2 6 4 0 u n i t s ) 79800 30.40 41 42 43 44 45 46 47 48 49 50 51 52 68500 2 5 . 54 disp ( ” C o s t o f 2 5 0 0 u n i t s 156095 ” ). disp ( ” Labour f o r c o m p l e t i n g 240 30.00 10000 ”). disp ( ” Overhead f o r c o m p l e t i n g 240 8. 57 disp ( ” Labour 300 30. 56 disp ( ” M a t e r i a l s 400 25. disp ( ” Equivalent Rs . 53 disp ( ” Put i n p r o c e s s and c o m p l e t e d ( 2 1 0 0 u n i t s ) 6329 132909 ”). 58 disp ( ” Overhead 80 .23 ”) disp ( ” O v e r h e a d s ( 2 6 4 0 u n i t s ) 21240 8 .23 7252 ”). 55 disp ( ” V a l u a t i o n o f work i n p r o c e s s − 30 t h j u n e ( 5 0 0 u n i t s ) ”). 0 6 ”). disp ( ” ” ) . 2 9 ”). 0 0 ”). Rs . disp ( ” M a t e r i a l s f o r c o m p l e t i n g 240 25.00 6000 ”).06 1934 ”). disp ( ” 169580 6 3 . ” ) disp ( ”Work−i n −p r o g r e s s −1 s t June ( 4 0 0 u n i t s ) 160 50. disp ( ” A n a l y s i s o f C o s t s h e e t ( FIFO ) ” ) .23 9068 ”).00 8000 ”). disp ( ” C o s t o f U n i t s Completed and t r a n s f e r e d Units Rate Amount” ) . 300 8.06 2417 ”) 59 disp ( ” C o s t o f 500 u n i t s (W. I . P) 21485 ”); Total disp ( ” P r o c e s s c o s t Rs . 1 7 7 5 8 0 ” ) 61 disp ( ” ” ) ; 62 disp ( ” P r o c e s s C o s t Account ” ) ; 63 disp ( ” Units Cost per Amount Units Cost per Amount” ) ; 64 disp ( ” unit u n i t ”); 65 disp ( ” Rs . Rs . Rs . Rs . ”); 66 disp ( ”To W. I . P 1 s t June 400 50.00 8000 By f i n i s h e d 2500 62.44 156095 ” ); 67 disp ( ” M a t e r i a l s 2600 25.00 68500 By s t o c k Account ” ) ; 68 disp ( ” Labour 30.23 79800 By W. I . P 30 t h June 500 42.97 21485 ” ); 69 disp ( ” O v e r h e a d s 8.06 21280 ”) ; 70 disp ( ” 3000 177580 3000 177580 ”); 60 Scilab code Exa 8.9 Output transfered and closing and opening work in progress 1 // Exa9 2 clc ; 3 clear ; 81 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 close ; disp ( ” Amount Units ”); disp ( ” P r o d u c t i o n Units % Equivalent % E q u i v a l e n t ”); disp ( ” Completion Units Completion Units ”); disp ( ” F i n i s h e d & T r a n s f e r e d 8000 100% 8000 100% 8000 ”); disp ( ” C l o s i n g work−i n −p r o g r e s s 2 0 0 0 100% 2000 50% 1000 ”); disp ( ” T o t a l P r o d u c t i o n 10000 10000 9000 ”); disp ( ” ” ) ; disp ( ” S t a t e m e n t o f c o s t ” ) ; disp ( ” Material Labour Overhead Total ”); disp ( ” Rs . Rs . Rs . Rs . ” ) ; disp ( ” C o s t o f o p e n i n g work−i n −p r o g r e s s 7500 3000 1500 12000 ”); disp ( ” C o s t i n and d u r i n g t h e p r o c e s s 100000 78000 39000 217000 ”); disp ( ” Total cost 107500 81000 40500 229000 ”); disp ( ” E q i v a l e n t u n i t s 10000 9000 9000 ”); disp ( ” C o s t p e r u n i t 10.75 9.00 4.50 2 4 . 2 5 ”); disp ( ” ” ) ; disp (8000*24.25 , ” ( a ) V a l u e o f o u t p u t t r a n s f e r e d : 8 0 0 0 u n i t s @ Rs . 2 4 . 2 5 i s ” ) ; disp ( ” ( b ) V a l u e o f C l o s i n g work−i n −p r o g r e s s ” ) ; disp (2000*10.75 , ” M a t e r i a l 2000 u n i t s @ 1 0 . 7 5 : ”) ; disp (1000*9.00 , ” Labour 1000 u n i t s @ 9 . 0 0 : ”); disp (1000*4.50 , ” Overhead 1000 u n i t s @ 4 . 5 0 : ”); disp (194000+35000 , ” T o t a l Rs . = ” ) ; 82 Scilab code Exa 8.10 Closing Inventory and material transfered 1 // Exa10 2 clc ; 3 clear ; 4 close ; 5 disp ( ” As s p o i l a g e occurs during process , i t s cost w i l l be c h a r g e d b o t h t o t h e c o m p l e t e p r o d u c t i o n and t h e c l o s i n g i n v e n t o r y . ” ) ; 6 disp ( ” Element U n i t s Material Labour Overhead ” ) ; 7 disp ( ” Kgs . Kgs . Kg . ” ) ; 8 disp ( ” Rs . Rs . Rs . ” ) ; 9 disp ( ” C u r r e n t p r o c e s s a c c o o u n t 27000 50000 40000 ”); 10 disp ( ” P r o c e s s c o s t p e r u n i t 2.5 5 4”); 11 disp ( ” C l o s i n g I n v e n t o r y 125000 5000 4000 ”); 12 disp ( ” C o s t o f m a t e r i a l t r a n s f e r e d t o t h e s e c o n d p r o c e s s : ”); 13 Opening_Inventory =10000; // i n Rs 14 Process_Cost =117500; // i n Rs 15 Closing_Inventory =21500; // i n Rs 16 disp ( Opening_Inventory + Process_Cost Closing_Inventory , ” C o s t o f m a t e r i a l t r a n s f e r e d t o t h e s e c o n d p r o c e s s= Rs . ” ) 17 disp (5000*2.5 , ” M a t e r i a l =Rs . ” ) ; 18 disp (5000*5*20/100 , ” Labour =Rs . ” ) ; 19 disp (5000*4*20/100 , ” Overhead =Rs . ” ) ; 20 disp (5000*2.5+5000*5*20/100+5000*4*20/100 , ” T o t a l= Rs . ”) 83 ” ) . disp ( ” M a t e r i a l 5 0 0 0 x Rs . 3 . disp ( ” Overhead 5 0 0 0 x Rs . 1 9 6 3 0 ”).11 Process account and Unrealised profit 84 . disp (10000+117500 -19630 . 27500 Rs . ” C o s t o f m a t e r i a l s t r a n s f e r e d t o s e c o n d p r o c e s s= Rs . disp ( ” C l o s i n g i n v e n t o r y Rs . 2 . disp ( ” C u r r e n t i n p u t 7000 7000 7000 ”). disp ( ”From : ”) disp ( ” Opening i n v e n t o r y 0 3000 3000 ”). disp ( ” The c a l c u l a t i o n w i l l be a s f o l l o w s : ” ) . 6 3 x 20% =3630 ” ) . ” ) . disp ( ” =Rs . i t s c o s t w i l l be c h a r g e d o n l y t o t h e f i n i s h e d p r o d u c t i o n and n o t t o t h e c l o s i n g i n v e n t o r y . 4 . disp ( ” E f f e c t i v e u n i t s 12000 11000 11000 ”). disp ( ” T o t a l c o m p l e t e u n i t s 7000 10000 10000 ”). 2 9 =11450 ” ) . ”). 5 5 x 20% =4550 ” ) . disp ( ” P r o c e s s c o s t Rs . disp ( ” C l o s i n g i n v e n t o r y 5000 1000 1000 ”). disp ( ” E f f e c t i v e U n i t s Material Labour Overhead ” ) . Scilab code Exa 8.55 3 .29 4. 4 0 0 0 0 ” ) .21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 disp ( ” ( b ) I t s p o i l a g e o c c u r s a t t h e end o f t h e p r o c e s s . disp ( ” P r o c e s s c o s t p e r u n i t 2. disp ( ” Labour 5 0 0 0 x Rs . 5 0 0 0 0 Rs . 6 3 ”). ” ) . Labour 3000 P r o c e s s B( o / p T r a n s f e r e d ) 5000 ”). ” ) . disp ( ” Amount Amount” ) . Amount Amount” ) . P r o f i t ( 2 0% on t r a n s f e r p r i c e ) ∗1000 ”) 6000 6000 ”).1 // Exa11 2 clc . disp ( ” ” ) . 85 . M a t e r i a l Consumed 2000 c l o s i n g Stock 1000 ”). ” ) . 3 clear . Rs . disp ( ”To P r o c e s s A( T r a n s f e r o f o /p ) 5000 By c l o s i n g S t o c k 2000 ”) disp ( ”To M a t e r i a l 3000 By P r o c e s s C( o /p T r a n s f e r e d ) 10000 ”). Process C A/ c Cr . disp ( ”To Labour 2000 ”). disp ( ” Rs . Rs . ” ) . disp ( ”Dr . ” ) . disp ( ”Dr . Rs . Amount Amount” ) . disp ( ”To P r o f i t ( 2 0% on t r a n s f e r p r i c e ) ∗2000 ”) disp ( ” 12000 12000 ”). 4 close . 5 disp ( ”Dr . disp ( ” ” ) . B A/ c 14 disp ( ” 12 13 15 16 17 18 19 20 21 22 23 Process Cr . A A/ c 6 disp ( ” 7 disp ( ” disp ( ”To By 9 disp ( ”To By 10 disp ( ”To 11 disp ( ” 8 Process Cr . disp ( ”To P r o c e s s C( Output R e c i e v e d ) 15000 By S a l e s 18000 ”) disp ( ”To P r o f i t 5000 By C l o s i n g S t o c k 2000 ”). 4000 ”).12 Process account and statement of profit 1 // Exa12 2 clc . 6 disp ( ” 7 disp ( ”To Raw m a t e r i a l 86 Tons Tons 1000 Amount Amount” ) . 10000 3000 1000 15000 ”). 200000 . disp ( ” 26 33 34 35 36 Rs . Scilab code Exa 8. disp ( ” 20000 18000 ”). ” ) . Amount Amount” ) . Rs . 5 disp ( ” P r o c e s s ( i ) Account ” ) . disp ( ” F i n i s h e d S t o c k Accouont ” ) .24 disp ( ” 25 27 28 29 disp ( ”To P r o c e s s B( T r a n s f e r o f o / p ) By c l o s i n g S t o c k ”) disp ( ”To M a t e r i a l By F i n i s h e d s t o c k ( o /p T r a n s f e r e d ) disp ( ”To Labour disp ( ”To P r o f i t ( 2 0% on t r a n s f e r p r i c e ) disp ( ” 30 31 32 disp ( ” ” ) . disp ( ” Rs . ” ) . Rs . ∗3000 ”) 18000 18000 ”). 4 close . 3 clear . disp ( ” 1000 297460 1000 297460 ”). disp ( ” P r o c e s s ( i i I ) Account ” ) . disp ( ”To p r o f i t 13525 By S a l e s 255 127500 ”). disp ( ”To p r o f i t 9960 By S a l e s 300 105000 ”). disp ( ” P r o c e s s ( i i ) Account ” ) . disp ( ”To t r a n s f e r from p r o c e s s i i 255 113895 By w e i g h t l o s t 51 ” ) . wages & e x p e n s e s 10710 By S c r a p 51 2550 ”). disp ( ” ” ) . disp ( ” By t r a n s f e r t o p r o c e s s i i 600 189960 ”).8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 By w e i g h t l o s t 50 ” ) . wages & e x p e n s e s 87500 By S c r a p 50 2500 ”). wages & e x p e n s e s 39500 By S c r a p 30 1500 ”). 87 . disp ( ” ” ) . disp ( ”To p r o f i t 255 By S a l e s 153 122400 ”). disp ( ” By t r a n s f e r to p r o c e s s i i 255 113985 ”). disp ( ”To t r a n s f e r from p r o c e s s i 6000 189960 By w e i g h t l o s t 60 ” ) . disp ( ” 255 124950 255 124950 ”). disp ( ” Tons Amount Tons Amount” ) . disp ( ” ” ) . disp ( ” S t a t e m e n t o f P r o f i t : ” ) . disp ( ”To Mfg . disp ( ” 1000 297460 600 242985 ”). disp ( ”To Mfg . disp ( ”To Mfg . disp ( ” Tons Amount Tons Amount” ) . 6 disp ( ” % of r e j e c t s labour cost per 100 ” ) . 10 disp ( ” 1 6000 1500 4500 33. 8 disp ( ” o f each cost of f i n a l Labour c o s t operation 7/2 % % ”). 32 disp ( ” T o t a l P r o f i t 29 disp ( ” P r o f i t a s p e r p r o c e s s disp ( ” L e s s : Management E x p e n s e s disp ( ” L e s s : S e l l i n g E x p e n s e s 27500 ”).i 9960 ”).33 200 10800 180 240 360 ” ) . 3 clear .13 Labour cost and value of work in progress 1 // Exa13 2 clc . disp ( ” t o t h e o /p Ratio /100 f o r on o /p o f each ”). 17500 ”). 7 88 . 9 disp ( ” O p e r a t i o n I n p u t R e j e c t s Output operation % Output ” ) . 5 disp ( ” U n i t O p e r a t i o n c o s t ” ) . 30 disp ( ” P r o f i t a s p e r p r o c e s s ii 13525 ”). 31 disp ( ” P r o f i t a s p e r p r o c e s s i i i 255 ” ) . 33 34 23740 ”). 35 disp ( ” 3760 ”). 10000 Net L o s s Scilab code Exa 8. 4 close . disp ( ” O p e r a t i o n No . disp (1210 -800 . ” ) . ) The l a b o u r c o s t o f w a s t e p e r 100 u n i t s =” ) .” Output 5 = ” ) . ” ( b . disp ( ”On o u t p u t o f e a c h o p e r a t i o n =7/4 ” ) .14 140 375 4875 13650 7. 4 6500 130 130 156 ” ) . disp ( ”On f i n a l o u t p u t o f e a c h o p e r a t i o n =( 8 ∗ 6) / 1 0 0 ” ) .33/100) .” Output 2 = ” ) . disp ( ” ” ) . 1 0 0 good u n i t s a r e o b t a i n e d . ) The work i n p r o g r e s s can be computed a s f o l l o w s : work i n p r o g r e s s a t t h e end o f ” ) .69 260 500 6000 7800 8. ) Column 6 i n d i c a t e s t h e numbers o f u n i t s t o be put i n hand i n e a c h o p e r a t i o n s o t h a t a t t h e end o f t h e f i n a l o p e r a t i o n . Thus i n t h i s c a s e .33/100) . disp ( round (100+100*20/100) .” Output 4 = ” ) . 3 5250 140 280 364 ” ) . disp ( round (140+140*7.” Output 3 = ” ) .33 120 800 4000 4800 20 100 disp ( ” 100 44925 800 920 1210 ”). disp ( ” ( a . 2 = u n i t s i n p r o g r e s s ∗(240+150+240∗7. 5250 7875 7. disp ( round (120+120*8. disp ( ” O p e r a t i o n No . 200 u n i t s would be t h e i n p u t t o o b t a i n 100 u n i t s o f good o u t p u t a t t h e end o f t h e 5 t h o p e r a t i o n . 5 4800 120 120 120 ” ) . disp ( ” ( c .14/100) .” Output 1 = ” ) .14/100) /100 ”).69/100) .11 disp ( ” 12 disp ( ” 13 disp ( ” 14 disp ( ” 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 5625 375 150 150 210 ” ) . 89 . disp ( round (130+130*7. 1 = u n i t s i n p r o g r e s s ∗ ( 2 4 0 ) / 1 0 0 ” ). disp ( round (150+150*33. 3 = u n i t s i n p r o g r e s s ∗ ( 4 0 7 . disp ( ” O p e r a t i o n No . 4 0 ”).29 30 31 32 33 34 35 36 37 38 39 disp ( ” O p e r a t i o n No . 5 = u n i t s i n p r o g r e s s ∗(908. 1 4 + 2 8 0 + 4 0 7 . disp ( ” 4 . disp ( ” O p e r a t i o n No .46 5 3 8 8 . disp ( ” 2 . 500 1210 6050 ”). 500 407.14 2 0 3 5 . disp ( ” 3 . 4 6 + 1 3 0 + 7 1 8 . disp ( ” 5 . 7 0 ”).34 9 0 8 3 . 1000 240 2400 ”). 4 6 ∗ 8 .34+60+908. 90 Value . 6 9 / 1 0 0 ) /100 ”). disp ( ” O P e r a t i o n Rs Rs ” ) .34∗20/100) /100 ”). disp ( ” 1 . 4 5 ”). disp ( ” S t a g e ( a t t h e end o f ) c o m p o ne n t s p e r 100 u n i t s Total Value ”). disp ( ” V a l u a t i o n o f work i n p r o g r e s s ” ) . 1000 908. 1 4 ∗ 7 . 4 = u n i t s i n p r o g r e s s ∗ ( 7 1 8 . 3 3 / 1 0 0 ) /100 ”). 750 718. AQ ) . ”MCV=” ) . ”MUV=” ) . f t . disp ( ” Note : ” ) disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e .1 Calculate material variances 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 // Exa1 clc . disp ( MPV . SP =5 // i n r u p e e s p e r s q . f t .Chapter 9 standard costing Scilab code Exa 9. close . // i n r u p e e s // ( i i ) MPV MPV = AQ *( SP . 91 ”) . // g i v e n d a t a : SQ =4000 // i n s q . f t . // i n r u p e e s // ( i i i ) MUV MUV = SP *( SQ . AQ =4300 // i n s q .50 // i n r u p e e s p e r s q . disp ( MUV . AP =5. clear .AP ) . f t . // ( i ) MCV MCV =( SQ * SP ) -( AQ * AP ) . ”MPV=” ) . // i n r u p e e s disp ( MCV . A3 = P3 + I3rd . A1 = P1 + I1st .3 Calculate material variances 1 // Exa3 2 clc . // i n y e a r s r =10. A2 = P2 + I2nd . //% p e r annum T =1 // i n y e a r I1st =( P1 * r * T ) /100. ” ) Scilab code Exa 9.2 Calculate material variances 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 // Exa2 clc . // For s e c o n d y e a r P2 = A1 . I3rd =( P3 * r * T ) /100. 92 . // compound i n t e r e s t o r 3 y e a r s CI = A3 .P1 . // For f i r s t y e a r P1 =500. // For t h i r d y e a r P3 = A2 . clear . // i n r u p e e s n =3. I2nd =( P2 * r * T ) /100.21 disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”) Scilab code Exa 9. disp ( ”Compound i n t e r e s t i s : ” + string ( CI ) + ” Rupees . close . ”MUV=” ) . disp ( ” Note : ” ) disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) .4 Calculate material variances 1 // Exa3 2 clc . // i n r u p e e s // ( i i i ) MCV MCV =( SQa * SP ) -( AQ * AP ) . // i n Rupees 10 SQa =( SQ * actualoutput ) / stdoutput . disp ( MPV . // m a t e r i a l p u r c h a s e d 93 . // i n r u p e e s // ( i i ) MPV MPV = AQ *( SP . // i n r u p e e s disp ( MUV .3 clear .20. 5 // g i v e n d a t a : 6 quantity =3000. // i n Rupees p e r Kg // ( i ) MUV MUV = SP *( SQa . // i n Kgs 8 stdoutput =80. // i n Kgs 7 actualoutput =240000. 4 close . disp ( MCV . // i n Kg AP = costofmaterial / AQ . // i n Rupees p e r Kg AQ =315000. ”MCV=” ) . 5 // g i v e n d a t a : 6 SQ =100. 25 disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Scilab code Exa 9. ”MPV=” ) . //SQa i s SQ f o r a c t u a l output SP =1. 3 clear . 4 close .AQ ) . // i n Kgs 9 costofmaterial =346500.AP ) . 4 close . disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) . SP =2.AP ) . // i n r u p e e s // ( i i ) MPV MPV = AQ *( SP . ”MPV=” ) . // i n r u p e e s // ( i i i ) MCV MCV =( SQa * SP ) -( AQ * AP ) . // r u p e e s p e r u n i t // ( i ) MUV MUV = SP *( SQa . ”MCV=” ) . c l o s i n g s t o c k =600. // i n t o n n e s 11 //SQ f o r a c t u a l o u t p u t 12 SQa =( SQ * actualoutput ) / stdoutput . disp ( MPV . 3 clear .7 value =9000. 13 // M a t e r i a l consumed o r AQ 14 AQ =3000+100 -600. 28 disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”). ”MUV=” ) . // i n r u p e e s disp ( MUV .5 Calculate material variances 1 // Exa3 2 clc . P u r c h a s e d = 3 0 0 0 . // r u p e e s f o r m a t e r i a l p u r c h a s e d 8 SQ =25. // i n t o n n e s 10 actualoutput =80.AQ ) . // r u p e e s p e r u n i t AP = value / quantity . 5 // g i v e n d a t a : 6 SQa =100 // i n Kgs 7 AQa =90 // i n Kgs 94 . disp ( ” Note : ” ) . 15 16 17 18 19 20 21 22 23 24 25 26 27 Scilab code Exa 9. // o p e n i n g s t o c k =100. 9 stdoutput =1. disp ( MCV . AQa ) .AQa ) .8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 SPa =2 // i n r u p e e s p e r Kgs APa =2. RSQb =( SQb *150) /( SQa + SQb ) . // m a t e r i a l A disp ( ” V a r i a n c e s f o r m a t e r i a l A” ) disp ( MUVa .AQb ) . // i n r u p e e s // ( i i i ) MCVb MCVb =( SQb * SPb ) -( AQb * APb ) .APb ) . disp ( MPVa .AQb ) . // i n r u p e e s // ( i i ) MPVb MPVb = AQb *( SPb . ”MMV=” ) . ”MPV=” ) .20 // i n r u p e e s p e r Kgs SQb =50 // i n kg AQb =60 // i n Kg SPb =5 // i n r u p e e s p e r Kg APb =4. disp ( MCVa . // ( i v ) MMVa MMVa = SPa *( RSQa . disp ( MMVa . // ( v ) MSUVb MSUVb = SPb *( SQb . ”MSUV=” ) // m a t e r i a l B disp ( ” V a r i a n c e s f o r m a t e r i a l B” ) 95 .APa ) . // i n r u p e e s // ( i i ) MPVa MPVa = AQa *( SPa . // ( v ) MSUVa MSUVa = SPa *( SQa .RSQa ) . // i n r u p e e s RSQa =( SQa *150) /( SQa + SQb ) . // ( i v ) MMVb MMVb = SPb *( RSQb . ”MCV=” ) . // i n r u p e e s // ( i ) MUVb MUVb = SPb *( SQb . // i n r u p e e s // ( i i i ) MCVa MCVa =( SQa * SPa ) -( AQa * APa ) .RSQb ) . disp ( MSUVa .50 // i n r u p e e s p e r Kg // ( i ) MUVa MUVa = SPa *( SQa . ”MUV=” ) . ”MCV=” ) . // i n r u p e e s // ( 2 ) Material price variance MPVb = AQb *( SPb .AQa ) . disp ( MMVb . // g i v e n d a t a : // mix r a t i o i s t h e same SQa =100 // i n Kgs AQa =120 // i n Kgs SPa =2 // i n r u p e e s p e r Kgs APa =2. ”MSUV=” ) disp ( ” Note : ” ) disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) . // i n r u p e e s 96 . // i n r u p e e s // ( 3 ) Material usage variance MUVa = SPa *( SQa . ”MMV=” ) . disp ( MCVb . disp ( MPVb . close . // i n r u p e e s MPVa = AQa *( SPa . ”MUV=” ) .APa ) .disp ( MUVb . disp ( MSUVb . ”MPV=” ) . clear .6 Calculate material variances when mix ratio is same 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 // Exa 6 clc . 53 disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”) 46 47 48 49 50 51 52 Scilab code Exa 9.APb ) . // i n r u p e e s MCVb =( SQb * SPb ) -( AQb * APb ) .50 // i n r u p e e s p e r Kg // ( 1 ) Material cost variance MCVa =( SQa * SPa ) -( AQa * APa ) .20 // i n r u p e e s p e r Kgs SQb =50 // i n kg AQb =60 // i n Kg SPb =5 // i n r u p e e s p e r Kg APb =4. RSQa ) . disp ( MPVa .7.RSQb ) .AQa ) . MSUVb = SPb *( SQb . disp ( MMVb . disp ( MMVa . ”MCV=” ) . disp ( MSUVa .a Calculate material cost variances 1 // Exa 7 ( i ) 2 clc . 4 close . ”MUV=” ) . MMVb = SPb *( RSQb . disp ( MPVb . ”MSUV=” ) // m a t e r i a l B disp ( ” V a r i a n c e s f o r m a t e r i a l B” ) disp ( MUVb . // m a t e r i a l A disp ( ” V a r i a n c e s f o r m a t e r i a l A” ) disp ( MUVa . 3 clear . RSQb =( SQb *180) /(150) . disp ( MCVa . disp ( MCVb . ”MPV=” ) . ”MPV=” ) . disp ( MSUVb . ”MSUV=” ) disp ( ” Note : ” ) disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) .AQb ) . 97 . MMVa = SPa *( RSQa . // i n r u p e e s // ( 4 ) M a t e r i a l mix v a r i a n c e RSQa =( SQa *180) /(150) .AQb ) . ”MCV=” ) . ”MMV=” ) . 48 disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”) 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 Scilab code Exa 9. ”MMV=” ) .MUVb = SPb *( SQb . ”MUV=” ) . // ( 4 ) M a t e r i a l sub u s a g e v a r i a n c e MSUVa = SPa *( SQa . disp ( ” Note : ” ) disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) . ”MCVa=” ) . disp ( MCVb . 4 close . disp ( MCVc .// g i v e n d a t a : // mix r a t i o i s n o t same SQa =10 // i n Kgs AQa =10 // i n Kgs SPa =8 // i n r u p e e s p e r Kgs APa =7 // i n r u p e e s p e r Kgs SQb =8 // i n kg AQb =9 // i n Kg SPb =6 // i n r u p e e s p e r Kg APb =7 // i n r u p e e s p e r Kg SQc =4 // i n kg AQc =5 // i n Kg SPc =12 // i n r u p e e s p e r Kg APc =11 // i n r u p e e s p e r Kg // ( 1 ) Material cost variance MCVa =( SQa * SPa ) -( AQa * APa ) .b Calculate material usage variance 1 // Exa 7 ( i i ) 2 clc . // i n r u p e e s disp ( MCVa . // i n r u p e e s MCVb =( SQb * SPb ) -( AQb * APb ) . ”MCVc=” ) . // i n r u p e e s MCVc =( SQc * SPc ) -( AQc * APc ) .7. ”MCVb=” ) . 5 // g i v e n d a t a : 6 // mix r a t i o i s n o t same 98 . 28 disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”) 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Scilab code Exa 9. 3 clear . // i n r u p e e s MUVc = SPc *( SQc . // i n r u p e e s MUVb = SPb *( SQb . ”MUVa=” ) .AQb ) .7. disp ( ” Note : ” ) disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) .c Calculate material price variance 1 // Exa 7 ( i i i ) 2 clc . 28 disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”).SQa =10 // i n Kgs AQa =10 // i n Kgs SPa =8 // i n r u p e e s p e r Kgs APa =7 // i n r u p e e s p e r Kgs SQb =8 // i n kg AQb =9 // i n Kg SPb =6 // i n r u p e e s p e r Kg APb =7 // i n r u p e e s p e r Kg SQc =4 // i n kg AQc =5 // i n Kg SPc =12 // i n r u p e e s p e r Kg APc =11 // i n r u p e e s p e r Kg // ( 2 ) Material usage variance MUVa = SPa *( SQa . ”MUVb=” ) . disp ( MUVc . 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Scilab code Exa 9. // i n r u p e e s disp ( MUVa .AQa ) . 4 close . ”MUVc=” ) .AQc ) . disp ( MUVb . 5 // g i v e n d a t a : 6 // mix r a t i o i s n o t same 7 SQa =10 // i n Kgs 8 AQa =10 // i n Kgs 99 . 3 clear . disp ( ” Note : ” ) disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) . ”MPVa=” ) .d Calculate material mix variance 1 2 3 4 5 6 7 8 9 10 // Exa 7 ( i v ) clc . // i n r u p e e s MPVc = AQc *( SPc . disp ( MPVb . // i n r u p e e s MPVa = AQa *( SPa . disp ( MPVc .APb ) . // i n r u p e e s disp ( MPVa . clear . ”MPVc=” ) . close . ”MPVb=” ) .SPa =8 // i n r u p e e s p e r Kgs APa =7 // i n r u p e e s p e r Kgs SQb =8 // i n kg AQb =9 // i n Kg SPb =6 // i n r u p e e s p e r Kg APb =7 // i n r u p e e s p e r Kg SQc =4 // i n kg AQc =5 // i n Kg SPc =12 // i n r u p e e s p e r Kg APc =11 // i n r u p e e s p e r Kg // ( 2 ) Material price variance MPVb = AQb *( SPb .APa ) . // g i v e n d a t a : // mix r a t i o i s n o t same SQa =10 // i n Kgs AQa =10 // i n Kgs SPa =8 // i n r u p e e s p e r Kgs APa =7 // i n r u p e e s p e r Kgs 100 .7. 28 disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”) 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Scilab code Exa 9.APc ) . 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Scilab code Exa 9. disp ( MMVa . clear . // g i v e n d a t a : // mix r a t i o i s n o t same SQa =10 // i n Kgs AQa =10 // i n Kgs SPa =8 // i n r u p e e s p e r Kgs 101 . disp ( MMVb . ”MMV=” ) . MMVc = SPc *( RSQc . ”MMV=” ) . ”MMV=” ) .AQb ) . disp ( ” Note : ” ) disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) . 31 disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”).e Calculate material sub usage variances 1 2 3 4 5 6 7 8 9 // Exa 7 ( v ) clc .SQb =8 // i n kg AQb =9 // i n Kg SPb =6 // i n r u p e e s p e r Kg APb =7 // i n r u p e e s p e r Kg SQc =4 // i n kg AQc =5 // i n Kg SPc =12 // i n r u p e e s p e r Kg APc =11 // i n r u p e e s p e r Kg // ( 4 ) M a t e r i a l mix v a r i a n c e RSQa =( SQa *24) /(22) .AQc ) . RSQc =( SQc *24) /(22) MMVa = SPa *( RSQa . disp ( MMVc . RSQb =( SQb *24) /(22) .7. MMVb = SPb *( RSQb . close .AQa ) . disp ( MSUVc .APa =7 // i n r u p e e s p e r Kgs SQb =8 // i n kg AQb =9 // i n Kg SPb =6 // i n r u p e e s p e r Kg APb =7 // i n r u p e e s p e r Kg SQc =4 // i n kg AQc =5 // i n Kg SPc =12 // i n r u p e e s p e r Kg APc =11 // i n r u p e e s p e r Kg // ( 5 ) M a t e r i a l sub u s a g e v a r i a n c e MSUVa = SPa *( SQa . close .RSQa ) . disp ( MSUVa . disp ( ” Note : ” ) disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) . disp ( MSUVb .RSQc ) . ”MSUV=” ) .RSQb ) . MSUVc = SPc *( SQc . ”MSUV=” ) . // g i v e n d a t a : // mix r a t i o i s n o t same SQx =54 // i n Kgs AQx =40 // i n Kgs SPx =6 // i n r u p e e s p e r Kgs APx =6 // i n r u p e e s p e r Kgs SQy =44 // i n kg 102 .8 Calculate material variances 1 2 3 4 5 6 7 8 9 10 11 // Exa 8 clc . clear . MSUVb = SPb *( SQb . ”MSUV=” ) . 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Scilab code Exa 9. 28 disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”). 103 . ”MUVx=” ) . MSUVz = SPz *( SQz . RSQz =( SQz *114) /(118) MMVx = SPx *( RSQx . // i n r u p e e s // ( 4 ) M a t e r i a l mix v a r i a n c e RSQx =( SQx *114) /(118) . // ( 5 ) M a t e r i a l sub u s a g e v a r i a n c e MSUVx = SPx *( SQx . disp ( MCVy .RSQy ) .APx ) . // i n r u p e e s // ( 2 ) Material price variance MPVy = AQy *( SPy . MMVy = SPy *( RSQy . MMVz = SPz *( RSQz .AQx ) . disp ( MCVz .AQx ) .12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 AQy =50 // i n Kg SPy =5 // i n r u p e e s p e r Kg APy =5 // i n r u p e e s p e r Kg SQz =20 // i n kg AQz =24 // i n Kg SPz =7 // i n r u p e e s p e r Kg APz =7 // i n r u p e e s p e r Kg // ( 1 ) Material cost variance MCVx =( SQx * SPx ) -( AQx * APx ) . ”MCVy=” ) . ”MCVx=” ) .AQz ) . ”MCVz=” ) . MSUVy = SPy *( SQy . // m a t e r i a l Usage v a r i a n c e disp ( ” m a t e r i a l Usage v a r i a n c e s : ” ) disp ( MUVx . // i n r u p e e s MUVy = SPy *( SQy . RSQy =( SQy *114) /(118) .APy ) . // i n r u p e e s MPVz = AQz *( SPz . // i n r u p e e s MUVz = SPz *( SQz .AQz ) .AQy ) .AQy ) . // i n r u p e e s // ( 3 ) Material usage variance MUVx = SPx *( SQx .APz ) . // i n r u p e e s MPVx = AQx *( SPx .RSQx ) .RSQz ) . // i n r u p e e s MCVz =( SQz * SPz ) -( AQz * APz ) . // i n r u p e e s MCVy =( SQy * SPy ) -( AQy * APy ) . // m a t e r i a l C o s t v a r i a n c e disp ( ” m a t e r i a l C o s t v a r i a n c e s : ” ) disp ( MCVx . 4 close . disp ( MUVz . disp ( MPVz . disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”) Scilab code Exa 9. h e n c e t h e r e i s no m a t e r i a l P r i c e v a r i a n c e ” ) // m a t e r i a l Mix v a r i a n c e disp ( ” m a t e r i a l mix v a r i a n c e s : ” ) disp ( MMVx . ”MMVy=” ) . ”MMVz=” ) . disp ( MPVy . ”MPVx=” ) . ”MMVx=” ) . ”MSUVy=” ) disp ( MSUVz . ”MPVz=” ) . ”MUVy=” ) .50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 disp ( MUVy .9 Calculate material variances 1 // Exa 9 2 clc . 5 // g i v e n d a t a : 6 SQx1 =120 // i n Kgs 7 AQx =112 // i n Kgs 8 SPx =5 // i n r u p e e s p e r Kgs 104 . // m a t e r i a l P r i c e v a r i a n c e disp ( ” m a t e r i a l P r i c e v a r i a n c e s : ” ) disp ( MPVx . ”MPVy=” ) . ”MUVz=” ) . ”MSUVx=” ) disp ( MSUVy . 3 clear . // m a t e r i a l Sub u s a g e v a r i a n c e disp ( ” m a t e r i a l sub Usage v a r i a n c e s : ” ) disp ( MSUVx . ”MSUVz=” ) disp ( ” Note : ” ) disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) . disp ( MMVy . disp ( ” As s t a n d a r d p r i c e s and a t u a l p r i c e s a r e same . disp ( MMVz . disp ( MCVx + MCVy .AQy ) .AQx ) . RSQy =( SQy *200) /(200) . // i n r u p e e s // ( 3 ) Material usage variance MUVx = SPx *( SQx . ”MCVy=” ) . // i n r u p e e s // ( 2 ) Material price variance MPVy = AQy *( SPy . // i n kg // ( 1 ) Material cost variance MCVx =( SQx * SPx ) -( AQx * APx ) . // i n Rs TotalSQ = SQx1 + SQy1 -(( SQx1 + SQy1 ) * Loss ) /100. MMVy = SPy *( SQy1 . MMVx = SPx *( SQx1 . disp ( MCVy .RSY ) . // i n r u p e e s MPVx = AQx *( SPx . // i n Kg SCperunit = TotalSC / TotalSQ . // m a t e r i a l P r i c e v a r i a n c e 105 . MYV = SCperunit *( ActualYield . // i n kg ActualYield =150.AQy ) . ” T o t a l MCV=” ) . // i n r u p e e s MUVy = SPy *( SQy . // i n % // c a l c u l a t i o n o f SQ f o r a c t u a l o u t p u t StandardYield =( SQx1 + SQy1 ) -(( SQx1 + SQy1 ) * Loss ) /100. // ( 5 ) Material Yield variance TotalSC = SQx1 * SPx + SQy1 * SPy . // i n kg SQy =( SQy1 * ActualYield ) / StandardYield . // i n r u p e e s MCVy =( SQy * SPy ) -( AQy * APy ) .9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 APx =5 // i n r u p e e s p e r Kgs SQy1 =80 // i n kg AQy =88 // i n Kg SPy =10 // i n r u p e e s p e r Kg APy =10 // i n r u p e e s p e r Kg Loss =30. // m a t e r i a l C o s t v a r i a n c e disp ( ” m a t e r i a l C o s t v a r i a n c e s : ” ) disp ( MCVx . // i n Rs RSY =( StandardYield *(200) ) /(200) . // i n r u p e e s // ( 4 ) M a t e r i a l mix v a r i a n c e RSQx =( SQx *200) /(200) .APx ) .APy ) . // i n kg SQx =( SQx1 * ActualYield ) / StandardYield . ”MCVx=” ) .AQx ) . 10 Calculate material variances 1 // Exa 10 2 clc . disp ( MMVx + MMVy . // m a t e r i a l Mix v a r i a n c e disp ( ” m a t e r i a l mix v a r i a n c e s : ” ) disp ( MMVx . ”MMVx=” ) . ”MUVx=” ) . 4 close . disp ( ” As s t a n d a r d p r i c e s and a t u a l p r i c e s a r e same .46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 disp ( ” m a t e r i a l P r i c e v a r i a n c e s : ” ) disp ( MPVx . h e n c e t h e r e i s no m a t e r i a l P r i c e v a r i a n c e ” ) // m a t e r i a l Usage v a r i a n c e disp ( ” m a t e r i a l Usage v a r i a n c e s : ” ) disp ( MUVx . disp ( MMVy . ”MPVx=” ) . disp ( ” Note : ” ) disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) . disp ( MPVy . ”MUVy=” ) . ”MMVy=” ) . ”MYV=” ) . disp ( MPVx + MPVy . disp ( MUVy . ” T o t a l MMV=” ) . // m a t e r i a l Y i e l d v a r i a n c e disp ( ” m a t e r i a l Y i e l d v a r i a n c e s : ” ) disp ( MYV . disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”) Scilab code Exa 9. disp ( MUVx + MUVy . ” T o t a l MUV=” ) . 3 clear . ”MPVy=” ) . ” T o t a l MPV=” ) . 5 // g i v e n d a t a : 6 SQa1 =200 // i n Kgs 7 AQa =250 // i n Kgs 8 SPa =3 // i n r u p e e s p e r Kgs 106 . APc ) . MMVb = SPb *( RSQb .2 // i n r u p e e s p e r Kgs SQb1 =250 // i n kg AQb =300 // i n Kg SPb =5 // i n r u p e e s p e r Kg APb =4. // i n kg SQc =( SQc1 * ActualYield ) / StandardYield . // i n kg // ( 1 ) Material cost variance MCVa =( SQa1 * SPa ) -( AQa * APa ) . // i n Kg // c a l c u l a t i o n o f SQ f o r a c t u a l o u t p u t StandardYield =( SQa1 + SQb1 + SQc1 ) .Loss .AQb ) .AQb ) .APb ) . // i n Rs 107 . // i n r u p e e s MPVc = AQc *( SPc . RSQc =( SQc1 *900) /(750) . // i n r u p e e s MUVb = SPb *( SQb1 . // i n r u p e e s MCVc =( SQc1 * SPc ) -( AQc * APc ) .APa ) . MMVc = SPc *( RSQc .67 // i n r u p e e s p e r Kg SQc1 =300 // i n kg AQc =350 // i n Kg SPc =6 // i n r u p e e s p e r Kg APc =6.AQc ) .AQa ) . // ( 5 ) Material Yield variance TotalSC = SQa1 * SPa + SQb1 * SPb + SQc1 * SPc . // i n r u p e e s // ( 4 ) M a t e r i a l mix v a r i a n c e RSQa =( SQa1 *900) /(750) . // i n kg SQb =( SQb1 * ActualYield ) / StandardYield .AQa ) . // i n r u p e e s MPVa = AQa *( SPa . // i n kg SQa =( SQa1 * ActualYield ) / StandardYield .9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 APa =3. // i n r u p e e s MUVc = SPc *( SQc1 . // i n kg ActualYield =500. // i n r u p e e s MCVb =( SQb1 * SPb ) -( AQb * APb ) . RSQb =( SQb1 *900) /(750) . // i n r u p e e s // ( 2 ) Material price variance MPVb = AQb *( SPb . // i n r u p e e s // ( 3 ) Material usage variance MUVa = SPa *( SQa1 .AQc ) .43 // i n r u p e e s p e r Kg Loss =250. MMVa = SPa *( RSQa . ”MMVa=” ) .47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 TotalSQ = SQa1 + SQb1 + SQc1 -(( SQa1 + SQb1 + SQc1 ) * Loss ) /100. ” T o t a l MPV=” ) . disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”) 108 . ”MPVb=” ) . ”MCVc=” ) . disp ( MUVa + MUVb + MUVc . ” T o t a l MCV=” ) . ”MYV=” ) . // m a t e r i a l Y i e l d v a r i a n c e disp ( ” m a t e r i a l Y i e l d v a r i a n c e s : ” ) disp ( MYV . disp ( MPVa + MPVb + MPVc . disp ( MPVc . disp ( MCVb . // m a t e r i a l P r i c e v a r i a n c e disp ( ” m a t e r i a l P r i c e v a r i a n c e s : ” ) disp ( MPVa . disp ( MCVa + MCVb + MCVc . disp ( MPVb . ” T o t a l MMV=” ) . disp ( MMVb . // i n Kg SCperunit = TotalSC / StandardYield . ”MCVb=” ) . ”MUVa=” ) . disp ( ” Note : ” ) disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) . // i n Rs RSY =( StandardYield *(900) ) /(750) . disp ( MUVc . ”MMVb=” ) . disp ( MMVa + MMVb + MMVc . ”MCVa=” ) . ”MUVc=” ) . MYV = SCperunit *( ActualYield . ”MPVc=” ) . // m a t e r i a l C o s t v a r i a n c e disp ( ” m a t e r i a l C o s t v a r i a n c e s : ” ) disp ( MCVa . ”MUVb=” ) . ”MMVc=” ) .RSY ) . ” T o t a l MUV=” ) . // m a t e r i a l Usage v a r i a n c e disp ( ” m a t e r i a l Usage v a r i a n c e s : ” ) disp ( MUVa . disp ( MUVb . disp ( MMVc . // m a t e r i a l Mix v a r i a n c e disp ( ” m a t e r i a l mix v a r i a n c e s : ” ) disp ( MMVa . disp ( MCVc . ”MPVa=” ) . APa ) . close .11 Calculate material variances 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 // Exa 11 clc . // i n r u p e e s // ( 2 ) Material price variance MPVb = AQb *( SPb . RSQb =( SQb1 *400) /(400) . MMVb = SPb *( RSQb . // i n % // c a l c u l a t i o n o f SQ f o r a c t u a l o u t p u t StandardYield =( SQa1 + SQb1 ) -(( SQa1 + SQb1 ) * Loss ) /100.8 // i n r u p e e s p e r Kgs SQb1 =160 // i n kg AQb =120 // i n Kg SPb =3 // i n r u p e e s p e r Kg APb =3. // i n kg ActualYield =364.6 // i n r u p e e s p e r Kg Loss =10. // i n kg SQa =( SQa1 * ActualYield ) / StandardYield .APb ) . // i n r u p e e s MCVb =( SQb * SPb ) -( AQb * APb ) . clear . // i n kg SQb =( SQb1 * ActualYield ) / StandardYield . // ( 5 ) Material Yield variance 109 .AQb ) . // g i v e n d a t a : SQa1 =240 // i n Kgs AQa =280 // i n Kgs SPa =4 // i n r u p e e s p e r Kgs APa =3. // i n kg // ( 1 ) Material cost variance MCVa =( SQa * SPa ) -( AQa * APa ) . // i n r u p e e s // ( 4 ) M a t e r i a l mix v a r i a n c e RSQa =( SQa1 *400) /(400) .Scilab code Exa 9.AQa ) . // i n r u p e e s MPVa = AQa *( SPa . MMVa = SPa *( RSQa . 57 disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”) Scilab code Exa 9. 50 // m a t e r i a l C o s t v a r i a n c e 51 disp ( ” m a t e r i a l C o s t v a r i a n c e s : ” ) 52 disp ( MCVa . 46 disp ( MMVa + MMVb . // i n Rs 35 RSY =( StandardYield *(400) ) /(400) . 37 // m a t e r i a l P r i c e v a r i a n c e 38 disp ( ” m a t e r i a l P r i c e v a r i a n c e s : ” ) 39 disp ( MPVa . 47 // m a t e r i a l Y i e l d v a r i a n c e 48 disp ( ” m a t e r i a l Y i e l d v a r i a n c e s : ” ) 49 disp ( MYV . 3 clear . ”MPVb=” ) .RSY ) . 55 disp ( ” Note : ”) 56 disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e . 54 disp ( MCVa + MCVb .12 Calculate labour variances 1 // Exa 12 2 clc . // i n Kg 34 SCperunit = TotalSC / StandardYield . ”MMVb=” ) . ”MCVb=” ) . // i n Rs 33 TotalSQ = SQa1 + SQb1 -(( SQa1 + SQb1 ) * Loss ) /100. 36 MYV = SCperunit *( ActualYield . ”MMVa=” ) . 42 // m a t e r i a l Mix v a r i a n c e 43 disp ( ” m a t e r i a l mix v a r i a n c e s : ” ) 44 disp ( MMVa . 53 disp ( MCVb . ” T o t a l MCV=” ) . ” T o t a l MMV=” ) . ”MCVa=” ) . 41 disp ( MPVa + MPVb . 110 ”) . ”MPVa=” ) . 4 close . 45 disp ( MMVb .32 TotalSC = SQa1 * SPa + SQb1 * SPb . 40 disp ( MPVb . ”MYV=” ) . ” T o t a l MPV=” ) . // i n Rs / Hour GWP =16400. clear . // i n h o u r s SR =9.AR ) .13 Calculate labour variances 1 2 3 4 5 6 7 8 9 10 11 12 13 14 // Exa 13 clc . // i n Rs 111 . 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Scilab code Exa 9. // i n h o u r s AT =4000. // i n Rs / Hour // Labour C o s t v a r i a n c e LCV =( ST * SR ) -( AT * AR ) // Labour E f f i c i e n c y v a r i a n c e LEV = SR *( ST .AT ) . // i n Rs disp ( LCV .AT ) . // i n h o u r s SR =3.// g i v e n d a t a : ST =10. ” Labour Rate v a r i a n c e : ” ) disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) . // i n Rs // Labour Rate v a r i a n c e LRV = AT *( SR . close . 20 disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”). ” Labour C o s t v a r i a n c e : ” ) disp ( LEV . // i n RS AR = GWP / AT . ” Labour E f f i c i e n c y v a r i a n c e : ” ) disp ( LRV . // g i v e n d a t a : ST =4300. // i n Rs / Hour // Labour C o s t v a r i a n c e LCV =( ST * SR ) -( AT * AR ) // Labour E f f i c i e n c y v a r i a n c e LEV = SR *( ST . // i n Rs / Hour AR =10. // i n h o u r s AT =8. 15 // Labour Rate v a r i a n c e 16 LRV = AT *( SR . ” Labour Rate v a r i a n c e : ” ) 19 disp ( LEV . // i n h o u r s SR =1. ” Labour E f f i c i e n c y v a r i a n c e : ” ) 112 . // i n Rs 17 disp ( LCV . // i n RS AR = AWP / AT . ” Labour C o s t v a r i a n c e : ” ) 18 disp ( LRV .5. disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”). clear . // i n Rs / Hour AWP =6000. // i n Rs // Labour I d l e Time v a r i a n c e ITV = IT * SR .14 Calculate idle time variances 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 // Exa 14 clc . // i n Rs // Labour Rate v a r i a n c e LRV = AT *( SR . // i n Rs / Hour // Labour C o s t v a r i a n c e LCV =( ST * SR ) -( AT * AR ) // Labour E f f i c i e n c y v a r i a n c e AT1 = AT .AR ) . ” Labour E f f i c i e n c y v a r i a n c e : ” ) 20 disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e 21 ”) . // g i v e n d a t a : ST =3200. // i n Rs / Hour IT =100. // i d l e t i m e i s d e d u c t e d t o c a l c u l a t e r e a l efficiency LEV = SR *( ST . ” Labour C o s t v a r i a n c e : ” ) disp ( LEV .AR ) . close . // i n h o u r s AT =3000.IT .AT1 ) . Scilab code Exa 9. // i n Rs disp ( LCV . disp ( LRV . ” Labour I d l e Time v a r i a n c e : ” ) 113 . close . ” Labour I d l e Time v a r i a n c e : ” ) disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) . // i n h o u r s SR =5. // i n Rs / Hour IT =400.AR ) . // i n h o u r s AT =10800. // i n Rs disp ( LCV . // i n Rs // Labour Rate v a r i a n c e LRV = AT *( SR . // h o u r s / u n i t ST = P * T . // i n Rs / Hour // Labour C o s t v a r i a n c e LCV =( ST * SR ) -( AT * AR ) // Labour E f f i c i e n c y v a r i a n c e AT1 = AT .20. // g i v e n d a t a : P =1000. ” Labour Rate v a r i a n c e : ” ) disp ( ITV . ” Labour E f f i c i e n c y v a r i a n c e : ” ) disp ( LRV .15 Calculate idle time variances 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 // Exa 15 clc . 23 24 25 Scilab code Exa 9. 26 disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”).AT1 ) . ” Labour Rate v a r i a n c e : ” ) disp ( ITV . // i n Rs // Labour I d l e Time v a r i a n c e ITV = IT * SR .IT . clear . // i d l e t i m e i s d e d u c t e d t o c a l c u l a t e r e a l efficiency LEV = SR *( ST . // i n u n i t s T =10. ” Labour C o s t v a r i a n c e : ” ) disp ( LEV . // i n Rs / Hour AR =5. // t o t a l o f s t a n d a r d mix t i m e RSTa =( STa * TAMT ) / TSMT RSTb =( STb * TAMT ) / TSMT LMVa = SRa *( RSTa .ATa ) .ARb ) . // i n Rs / Hour SRb =4. // i n Rs / Hour ARb =4. // i n Rs 114 . close .disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) . // g i v e n d a t a : STa =20. // i n Rs LRVb = ATb *( SRb . // i n Rs / Hour ARa =3. 27 disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”).ARa ) . // i n h o u r s SRa =3. // i n Rs LEVb = SRb *( STb . 26 Scilab code Exa 9. // t o t a l o f a c t u a l mix t i m e TSMT = STa + STb .ATb ) . clear . // i n Rs // Labour Rate v a r i a n c e LRVa = ATa *( SRa .16 Calculate labour variances 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 // Exa 16 clc . // i n h o u r s ATa =30. // i n Rs / Hour // Labour C o s t v a r i a n c e LCVa =( STa * SRa ) -( ATa * ARa ) LCVb =( STb * SRb ) -( ATb * ARb ) // Labour E f f i c i e n c y v a r i a n c e LEVa = SRa *( STa .ATa ) . // i n h o u r s ATb =15. // i n h o u r s STb =25. // i n Rs // Labour Mix v a r i a n c e TAMT = ATa + ATb .5. ” Labour C o s t v a r i a n c e : ” ) disp ( ” Labour E f f i c i e n c y v a r i a n c e : ” ) disp ( LEVa . ” Labour E f f i c i e n c y v a r i a n c e LEVb : ” ) disp ( LEVa + LEVb . // i n ATu =2500. // g i v e n d a t a STs =1600. // i n STu =2400. ” Labour C o s t v a r i a n c e LCVb : ” ) disp ( LCVa + LCVb .LMVb = SRb *( RSTb . close . ” Labour E f f i c i e n c y v a r i a n c e LEVa : ” ) disp ( LEVb .50. ” Labour Mix v a r i a n c e LMVb : ” ) disp ( LMVa + LMVb . ” Labour Rate v a r i a n c e LRVa : ” ) disp ( LRVb . ” Labour E f f i c i e n c y v a r i a n c e : ” ) disp ( ” Labour Rate v a r i a n c e : ” ) disp ( LRVa . ” Labour Rate v a r i a n c e LRVb : ” ) disp ( LRVa + LRVb . // i n : hours hours hours hours Rs / Hour Rs / Hour 115 . // i n SRu =0. 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 Scilab code Exa 9.17 Calculate labour variances 1 2 3 4 5 6 7 8 9 10 11 // Exa 17 clc . // i n ATs =2500. ” Labour Rate v a r i a n c e : ” ) disp ( ” Labour Mix v a r i a n c e : ” ) disp ( LMVa .60. 47 disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”). ” Labour Mix v a r i a n c e LMVa : ” ) disp ( LMVb . ” Labour C o s t v a r i a n c e LCVa : ” ) disp ( LCVb . // i n Rs disp ( ” Labour C o s t v a r i a n c e : ” ) disp ( LCVa . clear .ATb ) . // i n SRs =0. ” Labour Mix v a r i a n c e : ” ) disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) . // i n Rs 32 LSEVu = SRu *( STu .50. ” Labour Mix v a r i a n c e LMVs : ” ) 47 disp ( LMVu . ” Labour E f f i c i e n c y v a r i a n c e : ” ) 41 disp ( ” Labour Rate v a r i a n c e : ” ) 42 disp ( LRVs .ATs ) . // i n Rs 20 // Labour Rate v a r i a n c e 21 LRVs = ATs *( SRs .RSTu ) . ” Labour Rate v a r i a n c e LRVs : ” ) 43 disp ( LRVu . ” Labour Rate v a r i a n c e : ” ) 45 disp ( ” Labour Mix v a r i a n c e : ” ) 46 disp ( LMVs . // t o t a l o f s t a n d a r d mix t i m e 26 RSTs =( STs * TAMT ) / TSMT 27 RSTu =( STu * TAMT ) / TSMT 28 LMVs = SRs *( RSTs .ARu ) . ” Labour E f f i c i e n c y v a r i a n c e LEVu : ” ) 40 disp ( LEVs + LEVu . // i n Rs 19 LEVu = SRu *( STu . // i n Rs 30 // Labour Sub E f f i c i e n c y v a r i a n c e 31 LSEVs = SRs *( STs . ” Labour C o s t v a r i a n c e LCVs : ” ) 35 disp ( LCVu . // i n Rs / Hour 13 ARu =0. // i n Rs 29 LMVu = SRu *( RSTu . ” Labour C o s t v a r i a n c e : ” ) 37 disp ( ” Labour E f f i c i e n c y v a r i a n c e : ” ) 38 disp ( LEVs . ” Labour Mix v a r i a n c e LMVu : ” ) 48 disp ( LMVs + LMVu .ATu ) .RSTs ) . // i n Rs 22 LRVu = ATu *( SRu . ” Labour Rate v a r i a n c e LRVu : ” ) 44 disp ( LRVs + LRVu . ” Labour Mix v a r i a n c e : ” ) 49 disp ( ” Labour Sub E f f i c i e n c y v a r i a n c e : ” ) 116 . // i n Rs / Hour 14 // Labour C o s t v a r i a n c e 15 LCVs =( STs * SRs ) -( ATs * ARs ) 16 LCVu =( STu * SRu ) -( ATu * ARu ) 17 // Labour E f f i c i e n c y v a r i a n c e 18 LEVs = SRs *( STs .ARs ) .40. ” Labour E f f i c i e n c y v a r i a n c e LEVs : ” ) 39 disp ( LEVu . ” Labour C o s t v a r i a n c e LCVu : ” ) 36 disp ( LCVs + LCVu .ATs ) .ATu ) . // i n Rs 23 // Labour Mix v a r i a n c e 24 TAMT = ATs + ATu . // t o t a l o f a c t u a l mix t i m e 25 TSMT = STs + STu . // i n Rs 33 disp ( ” Labour C o s t v a r i a n c e : ” ) 34 disp ( LCVs .12 ARs =0. // i n Rs / week ARs =65.18 Calculate labour variances 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 // Exa 18 clc . // i n w e e k s STss =1200. ” Labour Sub E f f i c i e n c y v a r i a n c e LMVs : ” ) disp ( LSEVu . s s=s e m i s k i l l e d .ATs ) . // i n Rs / week ARu =20. // i n Rs LEVss = SRss *( STss . // i n w e e k s STu =1800. ” Labour Sub E f f i c i e n c y v a r i a n c e : ” ) disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) . // i n w e e k s ATs =2560. // i n Rs / week // Labour C o s t v a r i a n c e LCVs =( STs * SRs ) -( ATs * ARs ) LCVss =( STss * SRss ) -( ATss * ARss ) LCVu =( STu * SRu ) -( ATu * ARu ) // Labour E f f i c i e n c y v a r i a n c e LEVs = SRs *( STs . // i n Rs 117 . // g i v e n d a t a : // l e t s= s k i l l e d . clear .disp ( LSEVs . 50 51 52 53 Scilab code Exa 9. u= u n s k i l l e d STs =3000. // i n w e e k s ATu =2240. // i n Rs / week ARss =40. // i n Rs / week SRu =24. close . 54 disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”).ATss ) . // i n Rs / week SRss =36. ” Labour Sub E f f i c i e n c y v a r i a n c e LMVu : ” ) disp ( LSEVs + LSEVu . // i n w e e k s ATss =1600. // i n w e e k s SRs =60. ” Labour E f f i c i e n c y v a r i a n c e : ” ) disp ( ” Labour Rate v a r i a n c e : ” ) disp ( LRVs . // i n Rs // Labour Mix v a r i a n c e TAMT = ATs + ATu + ATss . // i n Rs LMVu = SRu *( RSTu . ” Labour Mix v a r i a n c e LMVu : ” ) disp ( LMVs + LMVss + LMVu . ” Labour Rate v a r i a n c e LRVss : ” ) disp ( LRVu . ” Labour C o s t v a r i a n c e LCVs : ” ) disp ( LCVss .ARu ) . ” Labour Mix v a r i a n c e LMVss : ” ) disp ( LMVu . // i n Rs LRVu = ATu *( SRu . ” Labour Rate v a r i a n c e LRVu : ” ) disp ( LRVs + LRVss + LRVu . // i n Rs LMVss = SRss *( RSTss . // i n Rs // Labour Sub E f f i c i e n c y v a r i a n c e LSEVs = SRs *( STs . ” Labour Rate v a r i a n c e LRVs : ” ) disp ( LRVss . ” Labour E f f i c i e n c y v a r i a n c e LEVs : ” ) disp ( LEVss . ” Labour C o s t v a r i a n c e LCVu : ” ) disp ( LCVs + LCVss + LCVu .ARs ) . // i n Rs LSEVss = SRss *( STss . ” Labour C o s t v a r i a n c e LCVss : ” ) disp ( LCVu . // i n Rs LRVss = ATss *( SRss . // t o t a l o f s t a n d a r d mix t i m e RSTs =( STs * TAMT ) / TSMT RSTss =( STss * TAMT ) / TSMT RSTu =( STu * TAMT ) / TSMT LMVs = SRs *( RSTs .ARss ) . ” Labour E f f i c i e n c y v a r i a n c e LEVu : ” ) disp ( LEVs + LEVss + LEVu .ATs ) . // i n Rs disp ( ” Labour C o s t v a r i a n c e : ” ) disp ( LCVs .ATu ) .ATu ) .RSTu ) . ” Labour Mix v a r i a n c e : ” ) 118 . ” Labour E f f i c i e n c y v a r i a n c e LEVss : ” ) disp ( LEVu . ” Labour Rate v a r i a n c e : ” ) disp ( ” Labour Mix v a r i a n c e : ” ) disp ( LMVs .ATss ) .RSTss ) . ” Labour Mix v a r i a n c e LMVs : ” ) disp ( LMVss . ” Labour C o s t v a r i a n c e : ” ) disp ( ” Labour E f f i c i e n c y v a r i a n c e : ” ) disp ( LEVs . // t o t a l o f a c t u a l mix t i m e TSMT = STs + STu + STss .RSTs ) .26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 LEVu = SRu *( STu . // i n Rs LSEVu = SRu *( STu . // i n Rs // Labour Rate v a r i a n c e LRVs = ATs *( SRs . // i n u n i t s // Labour C o s t v a r i a n c e LCV =( ST * SR ) -( AT * AR ) // Labour E f f i c i e n c y v a r i a n c e LEV = SR *( ST .AT ) .64 65 66 67 68 69 70 disp ( ” Labour Sub E f f i c i e n c y v a r i a n c e : ” ) disp ( LSEVs . Scilab code Exa 9. disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”). // i n h o u r s SR =120. 119 .AR ) . // i n Rs // Labour Y i e l d v a r i a n c e SY =( StdYield * AT ) / StdTime . // i n u n i t s AY =1200. ” Labour Sub E f f i c i e n c y v a r i a n c e LMVss : ” ) disp ( LSEVu .19 Calculate labour variances 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 // Exa 19 clc . clear . close . // i n Rs // Labour Rate v a r i a n c e LRV = AT *( SR . ” Labour Sub E f f i c i e n c y v a r i a n c e LMVs : ” ) disp ( LSEVss . ” Labour Sub E f f i c i e n c y v a r i a n c e LMVu : ” ) disp ( LSEVs + LSEVss + LSEVu . // i n h o u r s StdYield =1000. // i n Rs StdTime =50. ” Labour Sub E f f i c i e n c y v a r i a n c e : ”) disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) . // i n Rs / Hour AR =200. // i n Rs / Hour SCperunit =6. // i n h o u r s AT =40. // g i v e n d a t a : ST =60. // i n h o u r s SRm =0. // i n Rs / h o u r ARm =0.40.60. // i n h o u r s STw =480. // i n Rs / h o u r SRw =0.70. Scilab code Exa 9.21 Calculate labour variances 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 // Exa 21 clc . // i n h o u r s ATm =1600. // i n Rs / h o u r ARb =0. ” Labour C o s t v a r i a n c e : ” ) 24 disp ( LEV .SY ) . // i n h o u r s STb =320. // i n Rs / h o u r ARw =0. ” Labour Y i e l d v a r i a n c e : ” ) 27 disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e 28 .80. clear . close . disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”).22 LYV = SCperunit *( AY . b=b o y s STm =960. ” Labour Rate v a r i a n c e : ” ) 26 disp ( LYV . w=women . // i n Rs / h o u r IT =220.65. ” Labour E f f i c i e n c y v a r i a n c e : ” ) 25 disp ( LRV .30. // i n Rs / h o u r SRb =0. // i n h o u r s // Labour C o s t v a r i a n c e LCVm =( STm * SRm ) -( ATm * ARm ) LCVw =( STw * SRw ) -( ATw * ARw ) LCVb =( STb * SRb ) -( ATb * ARb ) 120 ”) . 23 disp ( LCV . // g i v e n d a t a : // l e t m=men . // i n h o u r s ATw =400. // i n h o u r s ATb =200. ” Labour C o s t v a r i a n c e LCVm: ” ) disp ( LCVw .ARw ) . // i n Rs 40 LMVb = SRb *( RSTb . ” Labour E f f i c i e n c y v a r i a n c e LEVm : ” ) disp ( LEVw .ATm ) .24 // Labour E f f i c i e n c y v a r i a n c e 25 LEVm = SRm *( STm . ” Labour C o s t v a r i a n c e : ” ) disp ( ” Labour Rate v a r i a n c e : ” ) disp ( LRVm . // 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 i n Rs disp ( ” Labour C o s t v a r i a n c e : ” ) disp ( LCVm . ” Labour C o s t v a r i a n c e LCVb : ” ) disp ( LCVm + LCVw + LCVb . ” Labour Rate v a r i a n c e LRVm: ” ) disp ( LRVw . // i n Rs 30 LRVw = ATw *( SRw . ” Labour Rate v a r i a n c e : ” ) disp ( ” Labour E f f i c i e n c y v a r i a n c e : ” ) disp ( LEVm . // t o t a l o f s t a n d a r d mix t i m e 35 RSTm =( STm * TAMT ) / TSMT 36 RSTw =( STw * TAMT ) / TSMT 37 RSTb =( STb * TAMT ) / TSMT 38 LMVm = SRm *( RSTm .ARm ) . ” Labour E f f i c i e n c y v a r i a n c e LEVw : ” ) disp ( LEVb . ” Labour C o s t v a r i a n c e LCVw : ” ) disp ( LCVb . // t o t a l o f a c t u a l mix t i m e 34 TSMT = STm + STb + STw .ARb ) . ” Labour Rate v a r i a n c e LRVw : ” ) disp ( LRVb .ATw ) . // i n Rs 26 LEVw = SRw *( STw . // i n Rs 27 LEVb = SRb *( STb . // i n Rs 28 // Labour Rate v a r i a n c e 29 LRVm = ATm *( SRm .ATb ) . ” Labour E f f i c i e n c y v a r i a n c e LEVb : ” ) disp ( LEVm + LEVw + LEVb .IT . // i n Rs 32 // Labour Mix v a r i a n c e 33 TAMT = ATm + ATb + ATw . // i n Rs 39 LMVw = SRw *( RSTw .ATm ) . // i n Rs 41 // Labour I d l e t i m e v a r i a n c e 42 ITV = IT *(( STm * SRm + STw * SRw + STb * SRb ) /( STm + STw + STb ) ) . // i n Rs 31 LRVb = ATb *( SRb . ” Labour Mix v a r i a n c e LMVw: ” ) 121 . ” Labour Rate v a r i a n c e LRVb : ” ) disp ( LRVm + LRVw + LRVb . ” Labour Mix v a r i a n c e LMVm: ” ) disp ( LMVw . ” Labour E f f i c i e n c y v a r i a n c e : ” ) disp ( ” Labour Mix v a r i a n c e : ” ) disp ( LMVm .ATb ) .ATw ) . clear .disp ( LMVb . close . f t . // g i v e n d a t a : SQ =58000 // i n s q . f t . disp ( MRV . // i n h o u r s AT =185200. // i n r u p e e s // ( i i ) MPV MRV = AQ *( SP . 66 disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”). ” Labour Mix v a r i a n c e : ” ) disp ( ” Labour I d l e t i m e v a r i a n c e : ” ) disp ( ITV . ”MCV=” ) . f t . disp ( ” Note : ” ) 122 . // i n r u p e e s disp ( MCV .22 Calculate labour variances 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 // Exa22 clc . // i n r u p e e s // ( i i i ) MUV MUV = SP *( SQ . // i n Rs / Hour // ( i ) MCV MCV =( SQ * SP ) -( AQ * AP ) . // i n h o u r s SR =3.AP ) . 67 // Answer i n t h e book i s n o t c o r r e c t o f LMV 61 62 63 64 65 Scilab code Exa 9. // i n Rs / Hour AR =3.75. ”MUV=” ) .75 // i n r u p e e s p e r s q . ”MRV=” ) . ” Labour I d l e t i m e v a r i a n c e : ” ) disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) . AQ =60000 // i n s q . AP =6. f t . SP =7 // i n r u p e e s p e r s q . ST =174000.AQ ) .5. ” Labour Mix v a r i a n c e LMVb : ” ) disp ( LMVm + LMVw + LMVb . disp ( MUV . ” Labour Rate v a r i a n c e : ” ) disp ( LEV . // i n Rs disp ( LCV . // i n Rs // Labour Rate v a r i a n c e LRV = AT *( SR . disp ( ” P o s i t i v e v a r i a n c e s i n d i c a t e f a v o u r a b l e v a l u e ”) // Labour C o s t v a r i a n c e LCV =( ST * SR ) -( AT * AR ) // Labour E f f i c i e n c y v a r i a n c e LEV = SR *( ST .24 25 26 27 28 29 30 31 32 33 34 disp ( ” N e g a t i v e v a r i a n c e s i n d i c a t e a d v e r s e v a l u e ”) . ” Labour E f f i c i e n c y v a r i a n c e : ” ) 123 .AR ) .AT ) . ” Labour C o s t v a r i a n c e : ” ) disp ( LRV .
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