Bcom 2nd year tendor price notes
(Meaning & Definition of Tender Price)
… Often a contractor would consider his estimated cost before starting the contract work. Producers often have to tell them the approximate price in order to receive orders from customers, which is added by adding some profit to the estimated cost. This is called tendering or tender value. Tender prices are demanded from the producers before actual purchase for works in big business institutions, and the manufacturer through whom the variety of goods made is the best and the tender price is the minimum is ordered for the supply of the goods. Bcom 2nd year tendor price notes
According to the Institute of Cost and Works Accounts England – “The cost estimate sheet is a document that gives the estimated cost of the entire production or unit.” The tender price should be determined very carefully because the tender price is comparatively
The producer will not get the order if it is more and he will have to suffer loss if it is less than the cost. Since the tender price has to be decided before production, prior experience and past costs are mainly used as the basis for this. Last year
During the period, tenders are prepared keeping in mind the possible changes in the cost incurred on the manufacture of similar items.
Things to keep in mind while preparing the tender
(Elements should be kept in mind in the preparation of tender)
(1) Change in price
Generally, the prices of labor, materials and other means of production change daily in the market. Therefore, it is very important for the contractor to be aware of these changes while fixing the tender price at present so that a fair price can be determined.
(2) Cost per unit
The contractor should know the tender price / 74 time by knowing the cost per unit adequately because even a difference of money has a great effect on the order .
(3) Production Quantity
Some costs have no effect on the mere decrease or excess of production. These costs are of a permanent nature, while some costs decrease when the volume of production decreases and increases when it increases. These costs are variable costs. When the volume of production is high, the cost of fixed costs decreases per unit.
(4) Cost of Alteration –
If the variety of goods ordered. Changes in appearance, packing price, fashion, weight etc. have been demanded, so the cost of the change should also be taken into consideration. ..
A fixed percentage profit is included in the tender cost. The profit can be a fixed percentage of the cost. The profit can be levied on two bases.
(i) Percentage of profit on cost, and
(ii) Percentage of profit on sale
Profit calculation method
(i) Benefit if percentage of profit is given on cost- Total cost X percent 100%
(ii) Given the percentage of profit on sales – total cost X percent 100%
Tender value calculation
(Calculation of Tender Price)
Sometimes the cost of the last period of production or sales of some items is complete
The details are given and based on these details, the tenders value of similar items is calculated. If the cost of production in the previous period comes in different amount of expenditure, then the tender value should be calculated on the basis of cost per unit. Several forms are seen in tenders and estimates questions. Following are the main formats
(I) When there is a change in the cost of material or labor or both (When there is a change in the price of materials) – The materials, labor and other expenditure used in the tenders of goods should be taken in proportion to the cost of the previous period. . Then you should add that percentage to the increase in expenditure, reduce the percentage which is likely to decrease, and keep the same proportion of the expenditure which has not been given about it, which was in the previous period. The percentage of profit will remain the same, whatever is convenient in the previous period or on the cost or sale price, the percentage of profit should be taken out.
When tender is prepared on the basis of previous period (When tender is prepared on the basis of last period profit)
This type of tender form is used only when the cost of the last period for the determination of tender or tender price, as well as the number produced in the previous period, is also given and the desired number of items for the tender is also given. Generally, in such a situation, the variety, size, shape and quality of the goods produced and tendered during the previous period are the same. In this manner, the cost per unit of various parts of the cost is determined by preparing a cost sheet based on the cost information of the previous period. The total cost is then multiplied by the number of items related to the tender, per unit of each part of the cost.
(III) Fixed, variable and semi variable costs. Fixed expenses have no effect on decreasing or increasing production volumes such as factory rent, manager’s salary, etc. Variable expenses are proportionally reduced or increased according to the amount of production. If there is a clear instruction to reduce or exceed the proportion of these expenses, then adjustment should be made accordingly. These types of expenditures keep variability, but have less variability than proportions, rather than their direct proportional relationship with production. There are clear instructions regarding these. When the cost related information in the question is given on an appropriate basis, then the tender value is calculated keeping in mind the instructions given in the question.
(IV) When the expenses and production details of the last few weeks, months or years have been given and estimates have to be made based on them, sometimes the cost of the previous periods and the distribution of the quantity of production are given. And based on them, a certain amount of estimates have to be prepared in the current period. The percentage of profit is also given in the question.
If the cost of material and labor in the previous period was Rs.2,00,000 and the construction expenditure was Rs.40,000, then the construction expenditure would be 20% of the mixed cost of material and labor. If in the current period the mixed cost of material and labor is Rs. 30,000. If the construction expenditure is 20% of this cost i.e. Rs 6,000. Therefore, the proportion in which the mixed cost of material and labor changes, in the same proportion, there will also be a change in the factory expenditure.
(ii) Sales expenses per unit will remain the same. Expenditure per unit sales remains fixed, if the last. .. Total sales expenditure during the period was Rs. 24,000 and units produced were 12,000, then sales per unit
Spend 2 happen. If the estimated production in the current period is 16,000 units then the total sales
(ii) Sustainability in other expenses – Most of the other expenses related to office and administration are of stable nature. That is, even if there is a change in production
(I) When there is value and benefit of material and labor used in the tender, indirect expenses are not paid (when the amount of materials, required for tender is given percentage of promit is given. O me not given) The solution will also be the initial and final condition of the finished product in the description of the previous type of nature.
Therefore, the benefit of the previous period will not be known. Cost and Benefits The cost office will show the cost and the cost tomorrow. The factory outlay for indirect expenditure of the tenders will be the percentage of labor and administration outlay, nor is the statement of profit, why the expenditure is made on the same basis as factory cost ? Bcom 2nd year tendor price notes
Cost – Letter of meaning and definition
(Meaning and Definition of Cost Sheet)
The cost sheet or outlay sheet analyzes the expenses of production in an analytical manner, so that the total production cost of the units produced and each unit is known. Some definitions of the cost sheet are as follows
In the words of Harold J. Wheldon, “cost sheets are designed for managers. Therefore, it should include all the necessary details that will help the manager in checking the efficiency of production. “
According to JR Batilboi, “The cost sheet is a statement shown in the table, which covers the production cost of the card thus presented from the total production cost of a fixed time.
The type appears. It is not part of the double accounting system of cost accounts. Ordinarily more food is also made, so that the cost of the current period can be calculated from the same period of the fry period and last year. ”
In the words of Walter W. Bigg, the details of expenditure incurred on production within a certain time can be obtained from the financial books and the records of the treasury. These are represented in a memorial statement form. If this prospectus shows only the cost of the units generated over a certain period of time, then it is called a cost sheet. ”
According to ‘ICMA England’, “a cost sheet is a document that presents an estimated detailed cost collection in relation to a cost center or unit.” The car can be said to have been prepared as a cost sheet table
Which reveals in detail the cost of total production over a given period of time. It is not part of the wa system. More food is usually cooked in it so that
Or compare the current cost to the cost of past times. “Bcom 2nd year tendor price notes
Characteristics of Cost Sheet –
(1) It shows the total cost and cost per unit.
2 It also clarifies the various organs of cost.
(3) It is topical ie it can be weekly, semi-monthly, monthly, quarterly etc.
(4) It shows the relation of various costs to the total cost.
Cost – benefit of paper and Objectives
(Advantages and Objects of Cost Sheet) –
A cost sheet benefits the production institutions in many ways, so it is prepared. Some of its benefits are as follows
(1) Cost control The main purpose of the cost sheet is to determine the speed of the product produced. With the help of a cost sheet, it is possible to determine the correct cost of the product produced.
(2) The cost-control cost sheet compares current expenditures to past expenditures, in which the reasons for their change can be ascertained. If the reason for increase in expenses is inefficiency of employees, then they can be removed and control over expenses.
(3) Comparative Study of Cost Scores With the help of the cost sheet, it can be easily ascertained by comparing the cost estimates of the current period with the cost figures of the previous period. Spending less Bcom 2nd year tendor price notes
(4) Determining the selling price The producer can easily determine the selling price of the article, because the cost sheet gives him complete information about the total cost of the item.
(5) Fixing the Tender Price Tenders can be filled by the institution only when there is a maximum accurate estimate of the cost of the institution. Tender can be cost and price based only by comparative and analytical study of previous cost sheets.
(6) The production efficiency checks are prepared for the use of cost-sheet managers only. Based on the information provided in them, the manager obtains knowledge of the efficiency of the workers. If production capacity falls, it can be controlled.
(Advantages of Cost sheet)
(1) Help in determining the tender price
With its help, the tender price can be easily determined.
(2) Guidance to Manufacturer and Managers
With its help, manufacturers and managers get important information regarding the costs of the commodity, which are increasing the costs which need to be controlled.
(3) Knowledge of total cost and cost per unit (Computation of Total Cost and Cost per Unit) –
By this, the cost of total production made in a given period becomes known.
(4) Finding the portion of different expenses on each unit of production (Computation of Part of Different Expenses on Production of Every Unit)
By this, it can be known from the facility that which part of different expenses have been spent on each unit of production.
(5) Helpful in comparative study of cost data (Helpful in Comparative Study of Costing Data) –
By this, it can be easily found that the cost expenditure is increasing and which cost expenditure is decreasing by comparing it with the cost numbers of the previous period or periods.
(6) Helpful in Determination of selling price
Easily determine the sale price of the item with the help of producer cost sheet
Can, because the cost sheet gives complete information about the cost per unit of the item.
Bcom 2nd year tendor price notes
- Importance and Elements of Cost
- Contract and Job Costing
- Process Costing
- Operating Cost
- Reconciliation of Cost and Financial Accounts
- Unit of Output costing
- Tender price
- Machine Hour Rate
- Cost Contral Account and Integrate Accounts