GROUP 3_CASE STUDY FLY ASH_ver9.docx - SUBMISSION...

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SUBMISSION OF ASSIGNMENT ( GROUP) PART A: TO BE COMPLETED BY STUDENT Course Name/ Course Cod ACCOUNTING FOR DECISION MAKING (ACC7101 ) Lecturer: ASSOC. PROF. DR. AHMED RAZMAN ABDUL LATIFF Title Assignment: FLY ASH BRICK PROJECT: FEASIBILITY STUDY USING CVP ANALYSIS Submission Date: 02/11/2020 PART B: DECLARATION MARKS We hereby declare that the assignment is based on our work except for quotations and citations that have been duly acknowledged. We also declare that this assignment has not been previously or concurrently submitted for credit, either at Putra Business School or elsewhere. PART C: FOR OFFICE/LECTURER USE Accepted by: Signature: ____________________________________________ Name: Date: Remarks: NAME MATRIC NO. SIGNATURE A BDULLAH H ASSAN A BUKAR A LI A DRIANNI B INTI A BDUL R AUF H AFEZ F IKRI M D R EDZA J UMAAT B IN R OSELAN L EE S UH J ING L IM M EEI H UEY M URALI K RISHNA D HEPALLI N UR F ARHANA B INTI A BD K ARIM PBS20101067 PBS20101017 PBS20101046 PBS20101029 PBS20101069 PBS20101004 PBS20101044 PBS20101030
GROUP ASSIGNMENT “FLY ASH BRICK PROJECT: FEASIBILITY STUDY USING CVP ANALYSIS” GROUP 3 ACCOUNTING FOR DECISION MAKING (ACC7101) ASSOC. PROF. DR. AHMED RAZMAN ABDUL LATIFF PUTRA BUSINESS SCHOOL UNIVERSITI PUTRA MALAYSIA 02 ND NOVEMBER 2020 A BDULLAH H ASSAN A BUKAR A LI A DRIANNI B INTI A BDUL R AUF H AFEZ F IKRI M D R EDZA J UMAAT B IN R OSELAN L EE S UH J ING L IM M EEI H UEY M URALI K RISHNA D HEPALLI N UR F ARHANA B INTI A BD K ARIM PBS20101067 PBS20101017 PBS20101046 PBS20101029 PBS20101069 PBS20101004 PBS20101044 PBS20101030
Table of Contents 1. INTRODUCTION .......................................................................................... 1 2. INTERNAL & EXTERNAL FACTORS INFLUENCING THE USAGE OF ASH ...................................................................................................................... 3 3. COST BEHAVIOR ........................................................................................ 5 4. COST-VOLUME-PROFIT (CVP) ANALYSIS OF FLY ASH BRICK PROJECT ............................................................................................................. 6 4.1 DETERMINATION OF COSTS ................................................................. 6 4.2 CONTRIBUTION MARGIN MODEL ...................................................... 6 4.3 BREAKEVEN ANALYSIS ....................................................................... 13 5. ALTERNATE PRODUCTION SCENARIO ................................................ 18 6. RECOMMENDATIONS .............................................................................. 23 7. CONCLUSION ............................................................................................ 25 8. REFERENCES ............................................................................................. 26
1. INTRODUCTION Back in April, 2013 Rajiv Sharma had an idea to exploring the potential of establishing Fly Ash brick manufacturing, because after doing some research he feel this project can deliver huge potential profit. Along with his long-time friend Alok Gupta who also show interest on the project but having a few doubt on the project feasibility. As his friend has doubt, Sharma have confident on this project base on his preliminary analysis and base on this analysis he decide to set up a plant that can manufacture 4 million bricks per year. The partners also realize that actual production is based on market demand and estimated around 2.4 million bricks could be sell with average selling price at Rs 7,000 per 1000 bricks. Fly ash was a residue obtain after combustion of coal which is India use lot of coal to produce thermal power. Fly ash could be 80% of the residue product after the process of coal combustion. As the trend of using coal as main source of generating thermal power, this will keep the supply of fly ash steady and can be obtain easily.

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