COST SHEET

ANALYSIS OF
DIFFERENT COMPANY

• BY Manjeet Kumar
• Roll no- 20222073
• Course- BCOM(H)
• Section – C
• Submitted to – DR.
Madhu Monga mam
 •Chapter 1 Introduction

MEANING OF
COST
COST SHEET
CLASSIFICATION OF COST
COST SHEET
ANALYSIS OF DABUR
COMAPNY

COST SHEET ANALYSIS OF

Nestle
COST‟ represents a sacrifice of values, a foregoing or a release of
something of value. It is the price of economic resources used as a result
of producing or doing the thing costed. It is the amount of expenditure
incurred on a given thing. Cost has been defined as the amount
measured in money or cash expended or other party transferred, capital
stock issued, services performed or a liability incurred in consideration
of goods and serviced received or to be received.

CLASSIFICATION OF COST

Cost classification is the process of grouping costs according to their

common features. Costs are to be classified in such a manner that they are
identified with cost center or cost unit.

ON THE BASIS OF BEHAVIOUR OF COST

Behavior means change in cost due to change in output. On the basis

of behavior cost is classified into the following categories:

FIXED COST

It is that portion of the total cost which remains constant irrespective

of the output upto capacity limit. It is called as a period cost as it is
concerned with period. It depends upon the
passage of time. It is also referred to as non-variable cost or stand by
cost, capacity cost or “period” cost. It tends to be unaffected by
variations in output. These costs provide conditions for production
rather than costs of production. They are created by contractual
obligations and managerial decisions. Rent of premises, taxes and
insurance, staff salaries constitute fixed cost.
VARIABLE COST

This cost varies according to the output. In other words, it is a cost which
changes according to the changes in output. It tends to vary in direct
proportion to output. If the output is decreased, variable cost also will
decrease. It is concerned with output or product. Therefore, it is called as
a “product” cost. If the output is doubled, variable cost will also be
doubled. For example, direct material, direct labour, direct expenses and
variable overheads. It is shown in the diagram below.

SEMI-VARIABLE COST
This is also referred to as semi-fixed or partly variable cost. It remains
constant up to a certain level and registers change afterwards. These
costs vary in some degree with volume but not in direct or same
proportion. Such costs are fixed only in relation to specified constant
conditions. For example, repairs and maintenance of machinery, telephone
charges, supervision professional tax, etc.
ON THE BASIS OF ELEMENTS OF COST

Elements means nature of items. A cost is composed of three elements,

material, labour and expenses. Each of these elements can be direct and
indirect.

DIRECT COST

It is the cost which is directly chargeable to the product

manufactured. It is easily identifiable. Direct cost consists of three
elements which are as follows:
DIRECT MATERIAL

It is the cost of basic raw material used for manufacturing a product. It

becomes a part of the product. No finished product can be manufactured
without basic raw materials. It is easily identifiable and chargeable to
the product. For example, leather in leatherwares, pulp in paper, steel
in steel furniture, sugarcane for sugarcane etc. what is raw material for
one manufacturer might be finished product for another. Direct material
includes the following:
1. All materials specially purchased for production or the process.
2. All components purchased for production or the process.
3. Material transferred from one cost center to another or one process
to another.
4. Primary packing materials, wrappings, cardboard
boxes etc, necessary for preservation or protection of product.
DIRECT LABOUR OR DIRECT WAGES

It is the amount paid to those workers who are engaged in the

manufacturing line for conversion of raw materials into finished
goods. The amount of wages can be easily identified and directly
charged to the product. These workers directly handle raw materials,
work in progress and finished goods on the production line. Wages
paid to the workers operating lathes, drilling, cutting machines etc are
direct wages.
Direct wages include the payment made to the following group of
workers:

1. Labour engaged on the capital production of the product.

2. Labour engaged in aiding the operations viz. Supervisor, Foreman,
Shop clerks and Worker on internal transport.
3. Inspectors, Analysts needed for such production.
DIRECT EXPENSES OR CHARGEABLE EXPENSES

It is the amount of expenses which is directly chargeable to the product

manufactured or which may be allocated to product directly. It can be
easily identified with the product. For example, hire charges of a
special machine used for manufacturing a product, cost of designing
the product, cost of patterns, architects fees/surveyors fees, or job
cost of experimental work carried out especially for a job etc. Cost of
special drawings, cost of special layout designs, patents, patterns, cost of
models, surveyors fees, Excise duty, royalty on production, cost of
rectifying defective work. Utility of such expenses is exhausted on
completion of job.
INDIRECT COST

It is that portion of the total cost which cannot be identified and

charged directly to the product. It has to be allocated and apportioned and
absorbed over the units manufactured on a suitable basis. It consists of the
following three elements:
INDIRECT MATERIAL

It is the cost of the material other than direct material which cannot be
charged to the product directly. It cannot be treated as a part of the
product. It is also known as expenses materials. It is the material which
cannot be allocated to the product but which can be apportioned to the
cost units. Examples are as follows:

1. Lubricants, cotton waste, oil, grease, stationery etc

2. Small tools for general use
INDIRECT LABOUR
3. Some minor items such as thread in dress making, cost of nails in
shoemaking etc

It is the amount of wages paid to those workers who are not engaged on
the manufacturing line, for example, wages of workers in administration
department, watch n ward department, sales department, general
supervision.
INDIRECT EXPENSES

It is the amount of expenses which is not chargeable to the product

directly. It is the cost of giving service to the production department. It
includes factory expenses, administrative expenses, selling and
distribution expenses etc.
Overheads Or On Cost Or Burden Or Supplementary Cost

Aggregate of indirect cost is referred to as overheads. It arises as a result

of overall operation of a business. According to Weldon overheads mean,
”the cost of indirect material, indirect labour and such other expenses,
including services as cannot conveniently be charged direct to specific
cost units”. It includes all manufacturing and non-manufacturing
supplies and services.

These costs cannot be associated with a particular product. The principal

feature of overheads is the lack of direct traceability to individual
product. It remains relatively constant from period to period. The amount
of overheads is not directly chargeable i.e. it has to be properly allocated,
apportioned and absorbed on some equitable basis.
CLASSIFICATION OF OVERHEADS

 On the basis of functions

 Factory overheads

It is the aggregate of all the factory expenses incurred in connection with

manufacture of a product. These are incurred in connection with running
of factory. It includes the items of expenses viz, factory salary, work
managers salary, factory repairs, rent of factory premises, factory lighting,
lubricants, factory power, drawing office salary, haulage (cost of internal
transport) depreciation of plant and machinery unproductive wages,
estimation expenses, royalties, loose tools w/ off, material handling
charges, time office salaries, counting house salaries etc.
ADMINISTRATIVE OR OFFICE OVERHEADS

It is the aggregate of all the expenses as regards administration. It is the

cost of office service or decision-making. It consists of the following
expenses: Staff salaries, printing and stationery, postage and
telegram, telephone charges, rent of office premises, office
conveyance, printing and stationery and repairs and depreciation of
office premises and furniture etc.
SELLING & DISTRIBUTION OVERHEADS

It is the aggregate of all the expenses incurred in connection with sales and distribution of
finished product and services. It is the cost of sales and distribution services.

Selling expenses are such expenses which are incurred acquiring and retaining customers. It
includes the following expenses:

a. Advertisement
b. Show room expenses
c. Traveling expenses
d. Commission to agents
e. Salaries of Sales office
f. Cost of catalogues
g. Discount allowed
h. Bad debts written off
i.Commission on sales j-
Rent of Sales Room
k. Sample and Free
gifts
l. After sales service
expenses
m. Expenses on
demonstration and
technical advice to
prospective
customers
n. Free repairs and
servicing expenses
o. Expenses on market
research
p. Fancy packing and
demonstration.

Distribution expenses include all those expense which are incurred in connection
with making the goods available to customers these expense includes the following (a)
Packing charges (b) Loading charges (c) Carriages on sales (d) Rent on warehouse (e)
 COST SHEET

For determination of total cost of production a statement showing the

various elements of cost is prepared. This statement is called as a
statement of cost or cost sheet. Cost sheet is a statement which provides
assembly of the detailed cost of a cost center or a cost unit. It is a
statement showing the details of a) total cost of job b) Cost of an
operation or order. It brings out the composition of total cost in a
logical order under proper classifications & sub- divisions. The period
is covered by the cost sheet may be by a week a month or so. Separate
columns are provided to show total cost, cost per-unit etc. In case of
different products there are different cost sheets for different products. A
cost sheet is prepared under output or unit costing method.
PURPOSE OF COST SHEET

1. It gives the breakup of total cost under

different elements.
2. It shows total cost as well as cost per unit.
3. It helps in comparison with previous years.
4. It facilities preparation of tenders or
quotations.
5. It enables the management to fix up selling
price.
6. It controls cost.
DIVISIONS OF COST

PRIME COST

It comprises of all direct materials, direct labour and direct expenses. It is

also known as flat cost

Prime cost = Direct Materials + Direct Labour +

Direct Expenses

WORKS COST

It is also known as a factory cost or cost of manufacture. It is the cost of

manufacturing an article. It includes prime cost and factory expenses.

Works Cost = Prime Cost + Factory Overheads

COST OF PRODUCTION

It represents factory cost plus administrative

expenses.

Cost of Production = Factory Cost +

Administrative Expenses

TOTAL
COST

It represents cost of production plus selling and

distribution expenses.

Total Cost= Cost of Production + Selling &

Distribution Expenses

SELLING
PRICE

It is the price which includes total cost plus margin of profit or

minus loss, if any.

Selling Price = Total Cost +

Profit (-Loss)
NON COST ITEMS

Non-cost items are those items which do not form part of cost of a
product. Such items should not be considered while ascertaining the cost
of a product. These are items included in the Profit & Loss A/c.

These will not come in the cost sheet

a) Income tax
b) Interest on capital
c) Interest on loan
d) Profit on Sale of fixed assets
e) All the assets
f) Donations
g) Capital Expenditure
h) Discount on shares & Debentures
i) Commission to Partners, Managers etc
j) Brokerage
k) Preliminary Expenses Written off.
l) Wealth tax etc
m)Bonus to directors and employees if it is based on profit, expenses
of raising capital, penalties & fines.
UTILITY OF COST SHEET

DETERMINE THE TOTAL COST

A total cost sheet (statement) helps in determining aggregate cost of

manufacturing a product or providing a service.

DETERMINING PRODUCT PRICE

A cost sheet helps in identifying the total cost for a product or service
which in turn helps in properly pricing of products & services.

COST REDUCTION OR COST CONTROL

Cost sheets helps in identifying the total cost stage wise & any
unwanted cost can be curtailed.
PREPARE BUDGETS

A cost statement helps in preparing budget for

each department

PROFIT
PLANNING

It helps to minimize cost &

increase profits.

1. STAGE WISE COST IDENTIFICATION

Costs such as prime cost, factory cost, cost of production, cost of
goods sold, total cost of sale etc.

2. DETERMINE THE COST PER UNIT

This helps in determining cost per unit on which u can predict
further cost.
COST SHEET

PROFORMA OF COST SHEET

PARTICULARS TOTAL COST

Rs.

Opening Stock Raw Materials

Add: Purchase
XXX
Add: Carriage Inward

Add: Octroi and Customs Duty XXX

Less: Closing Stock of Raw Materials

XXX
Cost of Direct Material Consumed

Direct Wages
XXX
Direct or Chargeable Wages

XXX

PRIME COST

XXX
Add: Works of Factory Overheads:

XXX
Indirect Materials

Indirect Wages
XXX
Leave Wages
 Bonus to Workers
XXX
Overtime Wages

Fuel and Power

Rent and Taxes

XXX
Insurance

Factory Lightings XXX

Supervision
XXX
Works Stationary

Canteen and Welfare Expenses

XXX
Repairs

Works Salaries XXX

Depreciation of Plant and Machinery

XXX
Works Expenses

Gas and Water

XXX
Technical Director‟s Fees

Laboratory Expenses XXX

Works Transport Expenses

XXX
Works Telephone Expenses

Add: Opening Stock of Work-in-Progress

XXX
Less: Closing Stock of Work-in-Progress

Less: Sale of Waste XXX

 XXX
WORKS COST

XXX

XXX

Add: Office and Administration Overheads:

XXX
Office Salaries

Directors Fees XXX

Office Rents
And Rates
XXX
Office Stationary and Printing

Sundry Office Expenses XXX

Depreciation on Office Furniture

XXX
Subscription to Trade Journals

Office Lightings
XXX
Establishment Charges

Directors Traveling Expenses XXX

Consultants Fees
XXX
Contribution to Provident Fund

Postage
XXX
Legal Charges

Audit Fees
 Bank Charges XXX

Depreciation And
Repairs of Office Equipments XXX

Bonus to Staff

XXX
COST OF PRODUCTION
XXX
Add :Opening Stock of Finished Goods
XXX
Less: Closing Stock of Finished Goods
XXX

XXX
COST OF GOODS SOLD
XXX
XXX
Add: Selling and Distribution Overheads
XXX
Advertising XXX

Show Room Expenses XXX

XXX
Salesman‟s Salaries and
XXX
Expenses Packing Expenses
XXX
Carriage Outward
XXX
Commission of Sales Agents XXX

Cost of Catalogues XXX

XXX
Expenses of Delivery Vans
XXX
Collection Charges
XXX
 Traveling Expenses
XXX
Cost Tenders

Warehouse Expenses
XXX
Cost of Mailing Literature

Sales Manager‟s Salaries

XXX
Insurance of Showroom

Sales Director‟s Fees

Sales Office Expenses

Rent of Sales Office

Depreciation of Delivery Vans

Expenses of Sales Branch

Establishments

Branch Office Expenses

TOTAL
COST/TOTAL OF
SALES

Profit or Loss

SALES
 Chapter 2
Company Profile
 INTRODUCTION TO BRITANNIA INDUSTRIES

Britannia Industries Limited (BIL) is a major player in the Indian

Foods market with leadership position in Bakery category. Its brand
portfolio includes Tiger, Marie Gold, Good Day, 50:50 and Treat. The
Company was born in 21st March of the year 1918 as a public limited
company. The Company's plants are situated in Kolkata, Delhi,
Chennai, Mumbai and Uttarakhand. In 1921, it became the first company
east of the Suez Canal to use imported gas ovens. Britannia's business
was flourishing. But, more importantly, Britannia was acquiring a
reputation for quality and value. As a result, during the tragic World War
II, the Government reposed its trust in Britannia by contracting it to
supply large quantities of 'service biscuits' to the armed forces. A new
factory was established in the year 1924 at Kasara Pier Road in
Mumbai. In the same year, the Company became a subsidiary of Peek,
Frean & Company Limited, U.K., a leading biscuit manufacturing
company, and further strengthened its position by expanding the
factories at Calcutta and Mumbai. In 1952, the Kolkata factory was
shifted from Dum Dum to spacious grounds at Taratola Road in the
suburbs of Kolkata. During the same year automatic plants were
installed in Calcutta and later in 1954 the automatic plants were installed
in Mumbai plant, also in the same year the development of high quality
sliced and wrapped bread in India was initiated by the company and was
first manufactured at Delhi and a new bread bakery was set up at Delhi in
the year 1965. Britannia Biscuit Company takes over biscuit distribution
from Parry's during the year 1975.
 COST SHEET OF BRITANNIA BREAD
PROFORMA OF COST SHEET

Cost sheet for every 1lac units produced and sold.

Cost Per Unit

Quantity Manufactured 1 100000

Quantity sold 1 100000

CPU(Rs)

DIRECT COST

Raw materials consumed

Opening stock of raw materials 0

Purchases of Raw Materials 5.805

(-)Closing stock of Raw Materials 0

Materials Consumed 5.805

Direct labour/wages 0.124

Direct cost/expenses 0.2415

PRIME COST 6.1705

INDIRECT COST
Factory/Works Overheads
Indirect labour 0.122

Depreciation on Machinery 0.675

Works Overheads 0.05204

Cost of Maintanence 0.0589

Other Factory Expenses 0.0282

Supervisors Salary 0.0385

Power & Fuel 0.5678

Total Overheads 1.54244

FACTORY COST/WORKS COST 7.71294

Office and Administrative Overheads

Depreciation on office furniture@7% 0.0281

Office Rent 0.0585

Salary to Staff 0.089

Office and General Expenses 0.0257

Telephone expenses 0.0219

Electricity and Lightings 0.03123

Printing and stationary 0.00294

Total Office and Administrative Overheads 0.25737

COST OF GOODS SOLD 7.97031

Selling and Administrative Overheads

Sales Commission 0.705
Salary of Salesman 0.1

Carriage Outward 0.12798

Sales Expenses 0.057

Total Selling and Administrative Overheads 0.98998

COST OF SALES 8.96029

PROFITS 1.03971

SALES 10

Raw Materials Cost

Flour 3.756

Water 0.892

Yeast 0.6789

Salt 0.4781

Raw Materials per unit 5.805

NOTE
The Value are determined on the basis of apportionment as the
company produces more than one product (including fixed cost)
Cost sheet for every 1lac units produced and sold.
Some of the above Values are estimated
 COST SHEET ANALYSIS

Direct Cost:

Direct materials

To manufacture one unit of bread the following RAW MATERIALS are required.
Flour Water
Yeast Salt

Direct
labor/wages
:

Direct labor/Wages amounts to Rs. 0.124 per unit which is approximately

2.009% of the PRIME COST. This percentage is low because a good amount
of work is automated as a result of which Human resources are diverted to more
productive areas such as SALES and MARKETING.

Direct cost/expenses:

Direct cost includes costs incurred in bringing the raw materials into the
factory which is Carriage inward. It also includes the amount paid loading
unloading charges and other petty expenses.
Indirect Costs:

Factory Overheads:

The Factory Overheads includes the indirect labor, Depreciation on

Machinery, Works Overheads, Cost of Maintenance, Other Factory
Expenses, supervisors Salary and Power & Fuel.

 Indirect labor: The amount of indirect labor is Rs. 0.122 per unit.
This value includes sweeper charges, support staff etc.
 Depreciation on machinery: The depreciation is calculated on the basis
of WDV calculated @ 10% p.a. This value amounts to around 43.7% of
the FACTORY OVERHEADS. The percentage high because of the level
automation and technology used for production.

 Power: Per unit power and fuel consumption is Rs. 0.5678.

 Other factory expenses: Other factory expenses include maintenance of

factory and other miscellaneous expenses.
 Office and Administration Overheads:-

Office and administration overheads include Depreciation on office

furniture@7%, office rent, salary to staff, office and general expenses,
Postage and Telegrams, telephone expenses, electricity and lightings

 Salary to staff: The salary paid to staff comes up to around Rs. 0.089 per
unit cost.

 Office and general expenses: This comprises of refreshments (tea and

snacks), Postage and Telegrams and other petty expenses.

 Printing and stationary: This consists of photocopy charges, printouts

and other stationary items.

 Telephone Expenses: Calls made by the staff members.

 Electricity and lightings: It consists of office lighting and air

conditioning expenses
Sales and distribution overheads:-

Selling and distribution cost includes Sales Commission, Discount

allowed salary of salesmen, Carriage outward and Sales expenses

 Sales Commission :
As a part of encouragement for sales people, they are given commission
of 5 % of the total sales done by them.

 Discount allowed :
To attract whole sellers to buy the product they are offered a discount of
5% on the selling price.

 Salary of salesmen :
The average salary paid to the sales people is around Rs. 0.1 of the total
per unit cost of the product.
 Carriage outward :
To carry the finished goods to the whole sellers, the transportations charge
per unit/product is set as RS 0.12798.
 Sales expenses :
This includes expenses incurred on advertisements and promotional
expenses such as newspaper advertisements, hoardings, TV commercials
etc.
Profit: The Profit arise out of selling per unit of the product is 11.603%
of the total per unit cost price
FINDING OF THE COST SHEET ANALYSIS

1 Direct labor/Wages amounts to Rs. 0.124 per unit which is

approximately 2.009% of the PRIME COST
2 Direct cost includes costs incurred in bringing the raw materials
into the factory which is Carriage inward.
3 The amount of indirect labor is Rs. 0.122 per unit. This value
includes sweeper charges, support staff etc.
4 The depreciation is calculated on the basis of WDV calculated @
10% p.a. This value amounts to around 43.7% of the FACTORY
OVERHEADS
5 Office and administration overheads include Depreciation on
office furniture@7%, office rent, salary to staff, office and
general expenses, Postage and Telegrams, telephone expenses,
electricity and lightings
6 As a part of encouragement for sales people, they are given
commission of 5 % of the total sales done by them.
7 The average salary paid to the sales people is around Rs. 0.1 of the
total per unit cost of the product.

Conclusion
1.Britannia is undoubtedly the number one retailer in India. It has built a
very emotional and cordial relationships with its customers which is
very essential for a successful business venture.

2.The employees accept their responsibilities wholeheartedly, accept

that it is their responsibility to carry out a part of their activities of
Britannia company as they will be held accountable for the quality of their
work.

3.As per the study, we would like to conclude that bread not being the
staple food in India, has definitely evolved as a substitute for chapattis,
rotis, rice, etc. It is easily available due to its excellent distribution
channels. Britannia bread has acquired almost 50% stake in daily bread
market.

4.Today a variety of breads are available, such as brown bread, whole

wheat bread, chutney bread, etc.

5.The company is reaching out to all the sections of the society. Even
after having many competitors around, Britannia bread has managed to
capture a large market share not just in the urban but has also managed to
penetrate the rural markets.
ANNEXURE
OF COST
SHEET
 Annexure

COST SHEET OF BRITANNIA BREAD

PROFORMA OF COST SHEET

Cost sheet for every 1lac units produced and sold.

Cost Per Unit

Quantity Manufactured 1 100000
Quantity sold 1 100000

CPU(Rs)
DIRECT COST
Raw materials consumed
Opening stock of raw materials 0

Purchases of Raw Materials 5.805

(-)Closing stock of Raw Materials 0

Materials Consumed 5.805

Direct labour/wages 0.124

Direct cost/expenses 0.2415

PRIME COST 6.1705

INDIRECT COST
Factory/Works Overheads
Indirect labour 0.122

Depreciation on Machinery 0.675

Works Overheads 0.05204

Cost of Maintanence 0.0589

Other Factory Expenses 0.0282

Supervisors Salary 0.0385

Power & Fuel 0.5678

Total Overheads 1.54244

FACTORY COST/WORKS COST 7.71294

Office and Administrative Overheads

Depreciation on office furniture@7% 0.0281

Office Rent 0.0585

Salary to Staff 0.089

Office and General Expenses 0.0257

Telephone expenses 0.0219

Electricity and Lightings 0.03123

Printing and stationary 0.00294

Total Office and Administrative Overheads 0.25737

COST OF GOODS SOLD 7.97031

Selling and Administrative Overheads

Sales Commission 0.705

Salary of Salesman 0.1

Carriage Outward 0.12798

Sales Expenses 0.057

Total Selling and Administrative Overheads 0.98998

COST OF SALES 8.96029

PROFITS 1.03971

SALES 10

Raw Materials Cost

Flour 3.756

Water 0.892

Yeast 0.6789

Salt 0.4781

Raw Materials per unit 5.805

NOTE
The Value are determined on the basis of apportionment as the
company produces more than one product (including fixed cost)
Cost sheet for every 1lac units produced and sold.
Some of the above Values are estimated