Question

In: Accounting

Sitcom Technology Case Case Study: Cost Concept and Cost Sheet Sitcom Technology was founded by two...

Sitcom Technology Case

Case Study: Cost Concept and Cost Sheet

Sitcom Technology was founded by two IIT graduates Rehan and Nixit in the year 2016 with the objective of providing IT solutions to various companies. They launched their FinTech start-up after getting funded Rs 25,00,000 by Business Ventures, one of the FinTech Angel investors. This was in the form of a loan at a 12% rate of interest.

Rehan utilized his unused two bedrooms flat in Bannerghatta, Karnataka worth Rs 60,00,000 for the office. Although he could get Rs 20,000 per month as rent for the same in the market, he rented it out to his start-up at Rs 15,000 per month and also decided to waive off the security deposit of Rs 100,0000 (going rate).

The other assets bought for their enterprise were four computers and a server (Rs. 200,000), two printers come scanner (Rs 18,000), two cordless phones & four mobiles (Rs 62,000), modem for wifi and other internet accessories (Rs 6000)and office furniture (Rs 1,70,000). After purchasing the furniture, they realized that Rs 20,000 invested in panel doors couldn’t be used. There was no return or refund for that. With no other option in hand, they sold these doors as scrap for Rs 8,000. Besides these purchases, they also invested Rs 40,000 in annual licenses for a lot of software.

Nixit picked up two of his juniors as Programmer and Visualizer come graphic designer after negotiating heavily on their hourly remuneration of 1,000 per hour on a freelancing basis. Depending on the number of hours invested in the development of a particular software/ERP/IT Solution, they were paid. In the month of April 2019, Sitcom Technology paid them Rs 84,000 for 42 hours of work put in by each one of them.

In addition to these two, a telephone operator and a data entry staff were also hired at Rs 13,000 and Rs 17,000 per month respectively. The monthly expenses of Sitcom Technology in April 2019 were:

Expenses

Amount(Rs.)

Salaries

30,000

Rent

15,000

Wages(peon)

10,000

Electricity

5,000

Telephone and internet charges

12,000

Office stationery

4,000

Trade Magazines

500

Conveyances

8,000

Advertising charges

1,000

Tours and travel

16,000

Snacks

6,000

Miscellaneous

5,000

In April 2019, Sitcom Technology received two big project orders from a leading private bank and one small programming work outsourced by a major IT company in Electronic City. The work was completed in the same month with all four of them putting in a lot of hours. The revenue generated from these three projects was Rs 4,10,000.

Question: Prepare the cost sheet for April 2019 and calculate the profit generated assuming the depreciation on fixed assets to be 10%.

NOTE- could you please provide me the solution ASAP.

Solutions

Expert Solution

Cost Sheet for April 2019
Sr NO Particulars Amount
A Gross Revenue For April 2019 4,10,000.00
B Cost for April 2019 ( 1 to 17) 2,29,466.67
1 Salaries      30,000.00
2 Rent      15,000.00
3 Wages(peon)      10,000.00
4 Electricity        5,000.00
5 Telephone and internet charges      12,000.00
6 Office stationery        4,000.00
7 Trade Magazines            500.00
8 Conveyances        8,000.00
9 Advertising charges        1,000.00
10 Tours and travel      16,000.00
11 Snacks        6,000.00
12 Miscellaneous        5,000.00
13 Charges Paid to developers      84,000.00
14 Deprication on Fixed Assets for April 2019        3,633.33
15 Interest on fund for April 2019      25,000.00
16 Loss on sale of Furniture (apprtioned for April 2019)        1,000.00
17 Cost of Annual software licence charges for april 2019        3,333.33
C Profit (A-B) 1,80,533.33

Working Notes.

Calulation of Depriciation
Particulars Amount
Computer and server     2,00,000.00
Printer and Scanner        18,000.00
cordless phones and mobiles        62,000.00
Modem and Wifi and internet accessories           6,000.00
Furniture     1,50,000.00
Total Cost of Fixed Assets     4,36,000.00
Rate of Depreciation 10%
Depreciation for year        43,600.00
Depreciation for April 2019           3,633.33
Calulation of Interest on Fund
Loan Taken 25,00,000.00
Rate Of Interest 12%
Interest for Year     3,00,000.00
Interest on fund for April 2019        25,000.00

Related Solutions

CASE STUDY: WEARABLE TECHNOLOGY COMPETITION PROJECT Case Study Information This year, a symposium of wearable technology...
CASE STUDY: WEARABLE TECHNOLOGY COMPETITION PROJECT Case Study Information This year, a symposium of wearable technology manufacturers are sponsoring a contest. The contest is open to anyone who wants to participate. Because of new technological advances in wearable technology, manufacturers are looking for new and innovative product and software solutions. Sarah is a senior student in the engineering technology program at Sheridan, and she is very interested in wearable technology production and supporting applications. She is very interested in everything...
Subject: Innovation and technology management Case 1: Use of Technology Federal Express (FedEx) was founded about...
Subject: Innovation and technology management Case 1: Use of Technology Federal Express (FedEx) was founded about 50 years ago. It handles on an average of 3 million package-tracking requests on a daily basis. To remain ahead of its competitors, FedEx strives on customer service by keeping a comprehensive website, FedEx.com. It increases customer service and reduces costs. For example, each request for information which can be retrieved from the website rather than by the call centre help FedEx to save...
Case: Delta's New Song: A Case on Cost Estimation in the Airline Industry INTRODUCTION Founded in...
Case: Delta's New Song: A Case on Cost Estimation in the Airline Industry INTRODUCTION Founded in 1924, Delta Airlines is the third largest U.S. airline in operating revenues and revenue passenger miles flown. 1 Traditionally, Delta's primary competition came from the other full-service airlines, including United Airlines and American Airlines. However, in recent years, the major airlines have increasingly been forced to compete with low-cost, no-frill airlines pioneered by "fly for peanuts" Southwest Airlines. The significant downturn in passenger volume...
CASE Delta's New Song: A Case on Cost Estimation in the Airline Industry INTRODUCTION Founded in...
CASE Delta's New Song: A Case on Cost Estimation in the Airline Industry INTRODUCTION Founded in 1924, Delta Airlines is the third largest U.S. airline in operating revenues and revenue passenger miles flown. 1 Traditionally, Delta's primary competition came from the other full-service airlines, including United Airlines and American Airlines. However, in recent years, the major airlines have increasingly been forced to compete with low-cost, no-frill airlines pioneered by "fly for peanuts" Southwest Airlines. The significant downturn in passenger volume...
Define technology and the concept of technology.
Define technology and the concept of technology.
Case Study Deutche Bank Deutsche Bank was founded in Berlin in 1870 as a specialist bank...
Case Study Deutche Bank Deutsche Bank was founded in Berlin in 1870 as a specialist bank for foreign trade by Georg Siemens and L. Bambeger.  During the early years  major projects included the. Northern Pacific Railroad in the US and the Baghdad Railroad in Iraq.  During WWI the Deutsche Bank lost most of its foreign assets and had to sell of many holdings.  At the same time, however the bank helped to establishment of the film production company, UFA, and the merger of Daimler...
Case 1: Use of Technology Federal Express (FedEx) was founded about 50 years ago. It handles...
Case 1: Use of Technology Federal Express (FedEx) was founded about 50 years ago. It handles on an average of 3 million package-tracking requests on a daily basis. To remain ahead of its competitors, FedEx strives on customer service by keeping a comprehensive website, FedEx.com. It increases customer service and reduces costs. For example, each request for information which can be retrieved from the website rather than by the call centre help FedEx to save an estimated $1.87. The costs...
Case 1: Use of Technology Federal Express (FedEx) was founded about 50 years ago. It handles...
Case 1: Use of Technology Federal Express (FedEx) was founded about 50 years ago. It handles on an average of 3 million package-tracking requests on a daily basis. To remain ahead of its competitors, FedEx strives on customer service by keeping a comprehensive website, FedEx.com. It increases customer service and reduces costs. For example, each request for information which can be retrieved from the website rather than by the call centre help FedEx to save an estimated $1.87. The costs...
Case 1: Use of Technology Federal Express (FedEx) was founded about 50 years ago. It handles...
Case 1: Use of Technology Federal Express (FedEx) was founded about 50 years ago. It handles on an average of 3 million package-tracking requests on a daily basis. To remain ahead of its competitors, FedEx strives on customer service by keeping a comprehensive website, FedEx.com. It increases customer service and reduces costs. For example, each request for information which can be retrieved from the website rather than by the call centre help FedEx to save an estimated $1.87. The costs...
Case 1: Use of Technology Federal Express (FedEx) was founded about 50 years ago. It handles...
Case 1: Use of Technology Federal Express (FedEx) was founded about 50 years ago. It handles on an average of 3 million package-tracking requests on a daily basis. To remain ahead of its competitors, FedEx strives on customer service by keeping a comprehensive website, FedEx.com. It increases customer service and reduces costs. For example, each request for information which can be retrieved from the website rather than by the call centre help FedEx to save an estimated $1.87. The costs...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT