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    A Mini Project ON Accounting For Managers and Control (MS-5105)

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    Nitesh Kumar
    This document appears to be a mini project report submitted by Anandita Biswas for an accounting course. It includes a cost sheet and analysis for a startup cookie company called Yummy&Tummy Wheated Cookies. The cost sheet breaks down costs such as raw materials, labor, factory expenses, administrative costs, and selling expenses. The analysis then examines fixed vs variable costs, calculates break even point and margin of safety, and provides a sales strategy to increase profits.

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    A Mini Project ON Accounting For Managers and Control (MS-5105)

    Uploaded by

    Nitesh Kumar
    68 views9 pages
    This document appears to be a mini project report submitted by Anandita Biswas for an accounting course. It includes a cost sheet and analysis for a startup cookie company called Yummy&Tummy Wheated Cookies. The cost sheet breaks down costs such as raw materials, labor, factory expenses, administrative costs, and selling expenses. The analysis then examines fixed vs variable costs, calculates break even point and margin of safety, and provides a sales strategy to increase profits.

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    2050114 AMC MINI project

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    This document appears to be a mini project report submitted by Anandita Biswas for an accounting course. It includes a cost sheet and analysis for a startup cookie company called Yummy&Tummy Wheated Cookies. The cost sheet breaks down costs such as raw materials, labor, factory expenses, administrative costs, and selling expenses. The analysis then examines fixed vs variable costs, calculates break even point and margin of safety, and provides a sales strategy to increase profits.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    68 views9 pages

    A Mini Project ON Accounting For Managers and Control (MS-5105)

    Uploaded by

    Nitesh Kumar
    This document appears to be a mini project report submitted by Anandita Biswas for an accounting course. It includes a cost sheet and analysis for a startup cookie company called Yummy&Tummy Wheated Cookies. The cost sheet breaks down costs such as raw materials, labor, factory expenses, administrative costs, and selling expenses. The analysis then examines fixed vs variable costs, calculates break even point and margin of safety, and provides a sales strategy to increase profits.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 9

    A MINI PROJECT

    ON
    ACCOUNTING FOR MANAGERS AND CONTROL
    (MS-5105)

    Submitted by
    ANANDITA BISWAS
    2050114
    MBA, FIRST SEMESTER

    SUBMITTED TO
    DR. SOMA PANJA
    ASSISTANT PROFESSOR
    DoMS, NIT SILCHAR
    ACKNOWLEDMENT

    I, Anandita Biswas would be glad to take this opportunity and express deep regards to my supervisor,
    Dr.SOMA PANJA, for his guidance, monitoring and encouragement throughout the course .I would also
    like to thank my batchmates of NIT SILCHAR ,for information provided by them through this mini project
    period.
    YUMMY&TUMMY WHEATED COOKIES

    YUMMY&TUMMY WHEATED COOKIES is basically a company which produces cookies. There are
    different flavoured cookies we produce. The name YUMMY means you will find delicious cookies here and
    by naming TUMMY because we care for health conscious people. That is why we used Wheat here.
    ASSUMPTIONS:

    • This is a startup of cookies named “YUMMY&TUMMY WHEATED


    COOKIES”
    • The startup company opened on 1st January 2019.
    • It produces cookies for wholesalers.
    • Company opens for 24*7.
    • The company produces different flavoured cookies.
    • The cost sheet is prepared for 1st January-31st December 2019

    COMPONENTS OF THE COST SHEET:

    • Prime cost: prime costs includes those costs which are directly related to production like raw
    materials and labour expenses. Here raw materials are sugar, wheat flour, milk solids, butter and
    flavours.

    • Works cost: It includes prime cost and factory expenses. Here factory expenses are both fixed and
    variable costs. Fixed costs: factory rent, factory insurance, salary of supervisor, depreciation and
    power. Variable costs are electricity of factory, Cleaning expenses and machine running expenses.

    • Cost of production: It includes Works cost and administrative expenses. Here administrative
    expenses are office staff salary, rent of land and office space, furniture, computer, internet bill and
    other office expenses.

    • Total cost: It includes cost of production and Selling and Distribution expenses. Here Selling and
    distribution expenses are advertisement, carriage outward , travel expenses and packing expenses.
    COST SHEET for YUMMY&TUMMY WHEATED COOKIES

    Column Particulars Details(Rs) Total Cost(Rs)


    Direct material(raw material consumed)
    Opening stock 0
    Add Sugar 250000
    Wheat Flour 400000
    Milk solids 250000
    Butter 200000
    Flavour 50000
    Less closing stock 0
    Add Direct Labour 250000
    Add Direct expenses 85000

    Prime Cost 1485000

    Add Factory Expenses


    Fixed Factory rent 50000
    Factory insurance 25000
    Salary of supervisor 35000
    Depreciation on machinery 80000
    Power 10000
    Variable Electricity of factory 25000
    Cleaning expenses 5000
    Machine running expenses 10000

    Works Cost 1725000

    Add Administrative Expenses


    Salary of office staff 200000
    Rent of Land and Office space 75000
    Furniture 20000
    Computer 30000
    Internet bill 15000
    Other office expenses 15000
    Cost of production 2080000

    Add Selling and Distribution Expenses


    Advertisement 10000
    Carriage Outward 35000
    Travel Expense 55000
    Packing expense 40000

    Total Cost 2220000


    Profit 1780000
    Sales 4000000

    Here Total cost= Rs 22,20,000


    Profit=Rs 17,80,000
    Sales= Rs 40,00,000

    • Here opening stock for this company is 0, because it is a startup company.


    • Closing stock is also 0, that means next financial year company have to purchase raw materials in a
    bulk manner.

    From the above cost sheet we can found some critical points:

    • Here Raw materials cost such as sugar, wheat flour, Milk solid, Butter is
    (250000+400000+250000+200000) i.e: Rs 11,00,000. That means it alone covered 49.54% of
    total cost which cannot be reduced the amount because if we use cheap quality raw material then
    our product quality will also reduce.
    • Another is Direct Labour expense which is almost 11.26% of total cost. We can control these
    labour expenses by reducing overall cost of company.
    • Depreciation is 3.60% of total cost.
    • Salary of both supervisor and office staff is 10.58% of total cost.
    MARGINAL COSTING AND SALES STRATEGY

    Fixed Cost Rs

    Factory rent 50000

    Factory Insurance 25000

    Salary of Supervisor 35000

    Depreciation of machinery 80000

    Power 10000

    salary of office staff 200000

    Rend of Land and Office Expense 75000

    Furniture 20000

    Computer 30000

    Internet bill 15000

    Advertisement 10000

    Total 550000

    Variable cost Rs
    Sugar 250000
    Flour 400000
    Milk Solids 250000
    Butter 200000
    Flavour 50000
    Direct labour 250000
    Direct expenses 85000
    Factory Electricity 25000
    Cleaning Expenses 5000
    Machine running expenses 10000
    Other office expenses 15000
    Carriage outward 35000
    Travel expenses 55000
    Packing expense 40000

    Total 1670000
    Here we can see:
    • Fixed cost is 24.77% of total cost.
    • Variable cost is 75.22% of total cost.

    MARGINAL COST ANALYSIS:

    For that we need some values

    SALES(S) Rs 40,00,000

    FIXED COST(FC) Rs 5.50,000

    VARIABLE COST(VC) Rs 16,70,000

    CONTRIBUTION(C) Rs 23,30,000

    P/V RATIO 58.25%

    Contribution (C) = sale – variable cost


    = Rs 40,00,000- Rs 16,70,000
    =Rs 23,30,000

    P/V Ratio= (C/S) * 100%


    =(23,30,000/40,00,000) * 100%
    =58.25%

    BREAK EVEN POINT (in RUPEES) Rs 9,44,206.00

    MARGIN OF SAFETY Rs 30,55,794

    BREAK EVEN POINT in Rupees = (Fixed cost/ PV ratio)


    =550000/58.25%
    = Rs 9,44,206.00

    MARGIN OF SAFETY= (Actual sale-Break even sale)


    =40,00,000-9,44,206
    =Rs 30,55,794
    SALES STRATEGY:

    • Margin of safety of YUMMY&TUMMY WHEATED COOKIES is higher than break even


    point. That means the company will earn high amount of profit.

    • If company wants Rs 30,00,000 amount of profit

    Then SALES should be

    (Fixed cost+ Desired profit amount)/PV ratio

    =(5,55,000+30,00,000)/58.25%

    = Rs 60,94,420.60

    Strategy to increase sale is by improving product quality, hiring skilled labours and wide
    distribution.

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