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MBA, Belgaum.
Project Report on `COSTING A Report Submitted in Partial Fulfillment of The Requirement for the Award of MASTERS DEGREE IN BUSINESS ADMINISTRATION 2011-2012 Submitted by: MALLIKARJUN N. HEBBALKAR USN NO. 2VX10MBA44
DECLARATION
I hereby declare that this project report titled as " costing, In plant Training It has been prepared by me as part of my academics during the year 4th Dec 2006 to 31st Dec 2006 and 1st Jan 2007 to 31st March 2007, two days in a week. For the partial fulfillment of degree of "Master of Business Administration", under the guidance and supervision of our PROF.NITYANAND, at VISVESVARAYA TECHNOLOGICAL UNIVERSITY BELGAUM
To the best of my knowledge and belief the matter presented in this report has not been submitted earlier for the award of any degree to any university. This report is prepared by me on my own efforts.
MALLIKARJUN N. HEBBALKAR
CONTENTS S.No. TITLES I. Company Profile II. Sector Details History Functions Objectives Vision Mission Products Organization Chart Departments Milk procurement Procedure
PAGE No. 01 02 04 18 18 19 19
Research Methodology Need for the study Objectives Data Collection Method Sample Size Tools for data collection
20 30 31 31 31 32
III.
33 69 75
IV.
SECTOR DETAILS HISTORY FUNCTIONS OBJECTIVES VISION MISSION PRODUCTS ORGANIZATION CHART DEPARTMENTS MILK PROCUREMENT PROCEDURE
A. SECTOR DETAILS
Dharwad milk union (DMU) came into existence on 3-3-1986. DMU was established under a co-operative Act as on 3-3-1986 at Dharwad & Gadag, Haveri, Uttar Kannada & Dharwad come under this operation. The Dharwad Milk Union is a co-operative society among the 13 establishments, under KMF. The Dharwad Milk Union (DMU) is one of the most modern plants in the country. It is located in the specious 25acres of land, located in Lakamanahalli Industrial Area, Adjacent to the National Highway-4. The milk is collected from farmers, that raw-milk is processed & sold in the markets with brand of Nandini. Around 1.18 lakhs liters of milk is collected every day from various farmers. Various quality control measures are undertaken specially in keeping the surroundings clean and healthy. Karnataka co-operative Milk Producers Federation Limited (KMF) is the Apex Body in Karnataka representing Dairy Farmers Co-operative. It is the 3rd largest Dairy Cooperative among the Dairy Co-operative in the country; in south Indian it stands 1st in terms of procurement as well as sales. The brand is the household name for fresh milk & milk products. Karnataka Milk Federation (KMF) sells products by name of NANDINI. They are famous for taste and quality. Nandini products like Peda, Paneer various types of Curds and milk are liked by thousands of people in India. Almost every district in state of Karnataka has milk producing co-operative Union.
B. History:
Evaluation
Nandini
Homogenized
Milk:
Nandini
Homogenized and Pasteurized milk is pure and contains 3.5% FAT and 8.5% SNF. It is rich in nutrients and has got the pouches. uniform thickness. One can feel the extra creamy feel till last drop. It is available in 500ml, 1 liter and 5 liters
Shubham Milk
MILK PRODUCTS:
Milk Powder
Flavoured Milk
Dharwad Peda
H. Organization Chart:
The organization is three tiered on Co-operative principles. A. Dairy Co-operative Societies at grass root level. B. District Co-operative Milk Unions at single / multi district level.
I. Departments Administration department. Purchase department. Quality control department. Production department. Procurement & input (P&I) department. Human resource department. Finance department. Marketing department.
Departmental Study:
1. Administration Department:
This department controls the over all functioning of the organization. The department looks after the administrative functions such as payment of salaries, arrangements to be made for conveying various meetings & formation of policies etc. Functions Maintaining up-to-date files, books etc. Collecting & presenting data in the form of useful information from the records. Implementing the organization system & organization policies in the coordinate manner. Maintenance of records of officers entrance & leave from the premises. Providing required facilities etc. Ensuring smooth running of the office by interfacing with the external agencies whenever required. E.g. making payment of telephone, water & electricity bills etc.
Other Functions: Employees attendance, Sanction of increments, Promotion, Transfers, Personal security, Time officers, Administrative officers, Labour officer.
Deputy Manager
Administrative Superintend
Administrative Superintend
Administrative Assistant
Time
Canteen
Security
2. Purchase Department:
As in any organization even in this organization the purchase department does the work of purchasing of goods & required raw material which are ordered by the stores department to maintain smooth functioning of all the departments in DMU & to meet the requirements at the right time. The weekly report submitted by the stores department gives an idea the item whether it is to be purchased or not. If the need arises they even make a call for tenders mentioning all the order. But in case of few cases the decision is left to the board. For instance, purchase of machinery is to done but its cost is in lakhs then this decision is left in the hands of board whether to purchase or not. If there is any defect in the goods or if they are not up to the specification then they are returned back or the suppliers are given a notice about the matter as the case may be. Function: Receiving indent (requirement) from various department. Determination of purchase material quality. Maintain comparative statement of all suppliers. Sending the purchased items to the quality control department for checking the quality. Return the defective goods to the respective suppliers for replacement. Calling tenders & sending quotations.
Purchase Officers
Purchase Superintend
Helpers
Deputy Manager
Assistants Manager
Chemist
Tester
Helper
4. Production Department
The main objective of this department is to follow up the production schedule as per the plan & to maintain good relations with other department in the plat & ensure to upgrade the technical efficiency of production. Most of the production equipment are imported from Sweden & Denmark. The entire production process, at every stage of production the plant takes care to maintain the quality & freshness of the milk & milk products. Objectives: Department preplans the production activities soon after receiving the order: Execute, Co-ordinate, organize & monitor the production activities. Increase the output as far as possible. Decrease that the actual production & wastages. Ensure that the actual production meets the planned requirements. Procedure following in production process: When the milk is received from the cans or tankers, it is first taken for the testing, here the freshness & quality of the milk is tested. After the approval of the testing officers the milk is then taken to the chilling centers for extending the self-life of the milk. DMU has 2-2.5 lakhs production capacity of milk, 12,000 liters/hr capacity cream separation, 36 tones/day production capacity of butter & 12-15 tones production capacity powder plants in Karnataka.
Everyday input: Milk processed (in liters) 1.18 to 1.24 lakhs Water (in liters) 8 to 10 lakhs. Electricity 11,000 Coal 6 tones.
Deputy Manager
Deputy Manager
Manager Assistants
Accounts Assistants
Stores Assistants
Junior Supervision
Manager (Dairy)
Dairy Technicians
Dairy Workers
Manager
Procurement Wings
Technical Wings
Deputy Manager
Development Officer
Assistant Manager
Marketing Assistant
Clerks
Clerks Helper
6. Finished goods store (FGS) department: FGS department is an intermediate between the production & marketing department. It is only concerned with issue of goods to marketing department which are received from production department. The goods are usually perishable items such as Butter, Ghee, Peda & paneer. The goods received are stored in cold storage under 16 degree Celsius condition & stored goods are issued on demand by the marketing department. If the stock is out of demand, the indent is sent back for further certification with regard to present stock. FGS is only concerned with quality dispatching aspect. Other sections do the accounting, clearing of stores, maintenance etc. Before dispatching, approval of the goods by quality department is mandatory. A consolidated dairy and monthly report is submitted to production, marketing and finance department. This department practices the BIN CARD system and FIFO method is followed. Policies Maintain maximum and minimum stock level for inventory so as to avoid twin Evils i.e., blockage of capital and storage in the disruption of the smooth running of the unit. Ordinary available commodities are maintained in a possible minimum number. Items of urgent nature are not easily available sometimes, so they are stored in sufficient number to meet the future demands.
MANAGER
Marketing Manager
Account Assistant
Marketing Manager
Dairy Workers
Benefits: Leave: Earn Leave (EL) 30 days per year. Extra ordinary accident, sick 10 months salary. House Construction / purchase advance 15 months salary. 10 days compensatory leave per 20 days H.P (Half Pay Leave). Medical Facilities (ESI). Shoe & uniform. Government Holidays. Attendance Bonus. Increment for promotion of small Family.
Recruitment: It will be organized by the central office. Every 10 years employee receives the time Bond bones (T.B.T). Retirement age 58 years.
Training & Education Programme: Women secretary training. Milk tester training. Woman management committee members training. First aid worker training. Animal husbandry & dairy management training programs.
Awareness Programs: Health & Nutrition. Gender Sensitization. Legal Literacy. Training Programs: National Diary Development Board (NDDB). National Dairy Research Institute (NDRI). Institute of Rural Management Anand (IRMA). Karnataka Milk Federation Centers Training Institute (Bangalore). Regional Training Centers (Dharwad). Vaikunt Mehata Institute of Co-operative Management (Pune).
8. Finance Department: This department controls the financial activities of the diary. Financial activities include like preparation of annual report, maintenance of accounts etc. this department is also held responsible for keeping the record of all inflow & outflow of money. It prepares budget every financial rule for receipts & payments.
Functions To prepare monthly accounts (such as receipts, payments accounts etc). To prepare integrated business plans, To prepare procurement & transportation change bills, To prepare quarterly financial statement, To prepare year ending financial statement (such as profit & loss accounts & balance sheet), Marking payment to farmers for the procurement of milk, maintain budgetary control, Passing all payment bills, Maintain sales Ledger, Preparation of cost sheet, Maintenance of all subsidiary books under Cooperative society Acts (books like cash book; debtors & salary registers). Direction to the internal audit.
Deputy Manager
Assistant Manager
Assistant Accountant
9. Marketing Department The marketing department of DMU is considerable extensive which covers major area such as Dharwad, Uttar Kannada district, Haveri, Gadag, Sirsi and Karwar covering almost 26 taluks. Marketing milk & milk products is done under the brand name called Nandini except loose milk packets & milk products which are marketed with the name of KMF by its marketing agencies. As the products are of perishable nature hence the biggest responsibility lines in the hands of marketing department to sell all the products before they loose its quality. Before pre-liberalization (July 21-1991) DMU enjoyed a monopoly due to Cooperative organization & other benefits received from the state government. But after 1991 the scenario totally changed, new products Diaries started grounding like mushrooms with entrance of private Diaries the DMU started facing tough competition in the market which resulted in major loss of market share gradually over the years. Today DMU as only 23% of total market share. DMU operates in 17 cities having total population 1.05 million. Functions To prepare the marketing plan at the very beginning of the year, taking into consideration the demand, sales production capacity & customers demands. To promote milk &milk products in the market. To study competitors products & their strategies.
Distribution channel DMU has its own marketing channels. It follows two types of direct channels. Those are; Consumer market Institutional market
Consumer market DMU sells directly to the consumers through its special vendors. It distributes its products to around 424 retailers & milk parlors. These sell only KMF products. Main Dairy
Agents Consumers
Consumers Institutional Markets: There is a demand of 4000 liters of milk per day from the institutions, hospitals, jails, school; hostels etc. strategies adopted by this department are as follows: Conduct awareness programs of milk & homogenized processed milk. Attain dairy complaints of consumer & retailers. Need for healthy promotional activities against competitors. Adopting differentiated marketing strategies in place of undifferentiated marketing strategies.
Competitors Bharat Siddhi Vinayak Datta Mayoor Goppal Aditya Arogya milk Loose vendors etc.
Marketing Manager
Deputy Manager
Technical Officer
Marketing Superintendent
Development Officer
Development Officer
Vanshroff
Vanshroff
Marketing Assistant
Marketing Assistant
DCS
Chilling
Storing
Pasteurization
Separation
Homogenization
Storing
Packing
Dispatching
Explanation of the procedure 1. Collection of milk In this stage, the milk is bought from the various DCS to the main dairy in a can containing 40 liters capacity of in milk in a vehicle. The cans are marked with two different colors to differentiate between the cow milk & buffalo milk. The recolor is used for buffalo milk & green or blue is used for cow milk. Once the milk is bought to the dairy it undergoes for testing of FAT & SNF. 2. Testing In this stage the testing takes place in three different processes, such as: Smelling (odor) test A man at the dock station checks the acidic nature of the milk by smelling or tasting the raw-milk. If it is found that the tasted milk has some bad smell or taste, then the dairy will pay lower rate of the milk to such society members than the normal rates. Extraneous matter appearancesThis test is conducted by the chemist. The chemist checks two aspects, mainly whether the milk is contaminated or not & secondly whether the milk is in liquid from or curd from. He also checks for the presence of any extraneous matters like dust & flies which results in spoilage of milk. Acidic test-
Strategy: the plan devised to maintain and build competitive advantage over
the competition.
Structure: the way the organization is structured and who reports to whom. Systems: the daily activities and procedures that staff members engage in to
Shared Values: called "super ordinate goals" when the model was first
developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic.
Style: the style of leadership adopted. Staff: the employees and their general capabilities. Skills: the actual skills and competencies of the employees working for the
company.
7S Checklist Questions Here are some of the questions that you'll need to explore to help you understand your situation in terms of the 7S framework. Use them to analyze your current (Point A) situation first, and then repeat the exercise for your proposed situation (Point B). Strategy:
What is our strategy? How do we intend to achieve our objectives? How do we deal with competitive pressure? How are changes in customer demands dealt with? How is strategy adjusted for environmental issues?
Structure:
How is the company/team divided? What is the hierarchy? How do the various departments coordinate activities? How do the team members organize and align themselves? Is decision making and controlling centralized or decentralized? Is this as it
Systems:
What are the main systems that run the organization? Consider financial and
Where are the controls and how are they monitored and evaluated? What internal rules and processes does the team use to keep on track?
Shared Values:
What are the core values? What is the corporate/team culture? How strong are the values? What are the fundamental values that the company/team was built on?
Style:
How participative is the management/leadership style? How effective is that leadership? Do employees/team members tend to be competitive or cooperative? Are there real teams functioning within the organization or are they just
What positions or specializations are represented within the team? What positions need to be filled? Are there gaps in required competencies?
Skills:
What are the strongest skills represented within the company/team? Are there any skills gaps? What is the company/team known for doing well? Do the current employees/team members have the ability to do the job? How are skills monitored and assessed?
SWOT Analysis of DMU Strengths Nandini enjoys good image Wide distribution network leads to regular & timely supply. Milk processed is local milk, which reduce the transportation cost. It enjoys highest market shares in the packed milk segment.
Weaknesses Proper customer feedback needs to be taken. Recurring quality problem. Lowest paying brand i.e., commission given by the company is less compared to other brands. Inadequate sales promotional activity. Due to bad smell that persists causes low sales.
Opportunities Threats No entry barriers for private players. There is scope for developing in new area. Availability of buffalo milk-improves milk quality. Predominant of loose milk segment- divide appropriate strategies.
a. Need for study Understand the true profitability of earned by the DMU. For getting the practical knowledge about the cost &costing techniques. Ascertainment of costs involved in producing milk and milk products. Analyze overhead costs so they can be managed more effectively. Measuring product performance. b. Objectives: To identify the process involved in procuring milk. To know and assign the cost involved for each identified activities.
d. Sample size The size of sample covers preceding three years financial statement. e. Tools for data analysis: tables, charts etc. Conceptual frame work: COST ACCOUNTING Cost accounting means recording expenditure & income in a systematic way so that this information would be useful in arriving at the cost of production. COST Cost means the amount of expenditure incurred on given thing or in rendering services. COST ACCOUNTANCY It is the widest of all the items includes not only costing & cost accounting but also cost control, cost audit, cost ascertainment &budgetary control. ADVANTAGES To the management: Profitable & unprofitable activities are disclosed. It guides future production policies.
INSTALLATION: Steps Objectives to be achieved after installing cost system. Studying the existing organization & routine. Deciding the cost structure of cost accounts. Determining the cost rates. Introducing the system. Organizing the cost office. Relation of cost office with other department. Authority and responsibility should be clearly defined. It is a document which provides for the presentation of estimated detailed cost in respect of cost unit. The statement summarizes the cost of manufacturing a particular list of products and discloses the prime cost, works cost, cost of production and total cost.
SL NO A 1 2 3 4 5 6
PARTICLARS Raw Materials Cost Price paid to DCS Chilling cost at CC BMC maintenance cost Transportation Charges from DCS to CC P&I input cost KMF levy
B 7 8 C 1 2 3 4 D 1 2 E 1 2 3 4 F G H I J
INTERPRETATION
SL NO A 1 2 3 4 5 6 B 7
PARTICLARS Raw Materials Cost Price paid to DCS Chilling cost at CC BMC maintenance cost Transportation Charges from DCS to CC P&I input cost KMF levy TOTAL Raw material Cost at Main Dairy Transportation cost from DCS to BMC
INTERPRETATION: Procurement of raw material for Homogenized Cow Milk is Rs. 18.40/ Process includes process cost, manufacturing cost, packing cost & labour cost which is Rs.1.94/ Administrative overhead includes other processing & marketing cost which is Rs.2.48/ Selling & distribution overhead includes transportation charges, retailer margin, advertisement expenses, salary of marketing manager etc. which is Rs.2.33/-
Cost sheet SHUBHAM MILK as on 24-11-2011 SL NO A 1 2 3 4 5 6 B 7 8 C 1 2 3 4 D 1 2 E 1 2 3 4 F G H I PARTICLARS Raw Materials Cost Price paid to DCS Chilling cost at CC BMC maintenance cost Transportation Charges from DCS to CC P&I input cost KMF levy TOTAL Raw material Cost at Main Dairy Transportation cost from DCS to BMC Transportation cost from BMC to Main Dairy + CC to PDD TOTAL Process cost Process & manufacturing cost Packing cost Direct Labour connected with processing Weight Volume Difference TOTAL Administrative Overheads General salary of all Staff Other Administrative Cost TOTAL Selling & Distribution Overheads Distribution Transportation Charges Retailer Margin Advertisement & publicity Salary of marketing Staff TOTAL Interest Depreciation TOTAL COST PROFIT/LOSS AMOUNT 17.40 0.15 0.04 0.66 0.14 0.01 18.40 0.17 0.39 0.56 0.72 0.57 0.08 0.57 1.94 2.29 0.19 2.48 0.98 1.00 0.07 0.28 2.33 0 0.16 25.87 0.13
INTERPRETATION: Procurement of raw material for Homogenized Cow Milk is Rs. 18.40/ Process includes process cost, manufacturing cost, packing cost & labour cost which is Rs.1.94/ Administrative overhead includes other processing & marketing cost which is Rs.2.48/ Selling & distribution overhead includes transportation charges, retailer margin, advertisement expenses, salary of marketing manager etc. which is Rs.2.33/-
100 Gram 2088.00 78.00 18.00 50.40 30.00 22.80 344.00 330.00 20.00 369.60 31.00 231.88 3582.68 115.57 1.50 0.11 0.15 7.20 1.20 10.16 125.73 170.00 44.27 170.00 17.00
25 Gram 2088.00 78.00 18.00 50.40 30.00 22.80 344.00 330.00 20.00 369.60 31.00 231.88 3582.68 115.57 14.00 0.00 0.15 0.00 1.50 15.65 131.22 170.00 38.78 170.00 4.25
Milk Purchase price (120 KG MILK) PTC/Kg (120 * 0.65) CC Chilling cost/Kg ( 120 * 0.15) CC Transportation/Kg (120* 0.42) P & I Input Cost (0.25*120) Other administrative cost (120*0.19) Genl salary COST OF HEATING COST DETERGENT COST OF SUGAR @ 11 % OF MILK @ Rs 28.00 / KG YIELD IN KGS COST OF DIRECT LABOUR TOTAL COST PER KG PACKING COST VPP TIXO TAPE BOPP TAPE DC CARTONS MC CARTONS TOTAL TOTAL MFG + PKG COST / KG AVG REALISATION CONTRUBUTION / KG DEALER PRICE / KG DEALER PRICE / PIECE
INTERPRETATION: Milk purchase price is 120 kg milk. PTC/kg (120*0.65). CC Chilling cost/kg (120*0.15). CC Transportation/kg (120*0.42). P&I cost (0.25*120). Other administrative cost (120*0.19). Cost of 1 kg PEDA is Rs. 15.57/ Packing cost differs depending upon size & weight of Peda i.e., for 250 grams its Rs.121.67/-, for 100 grams its Rs.125.73/- & for 25 grams its Rs.131.22/ Total cost includes manufacturing & packing cost per kg. Selling price is also calculated is done depending up on 1kg.
1000 Particulars Milk purchase price (1000 kg milk) PTC/kg (1000 * 0.75) Cc chilling cost/kg ( 1000 * 0.15) Cc transportation/kg (1000* 0.42) P & i input cost (0.25*1000) Other administrative cost (1000*0.19) General salary Cost of heating Cost of chemicals Cost of Maslin cloth YIELD in kgs Cost of labour TOTAL MFG COST Cost per kg PACKING COST 200 grm 17400.00 650.00 150.00 420.00 250.00 190.00 2870.00 770.00 42.00 15.00 160.00 441.60 23198.60 144.99 grm 17400.00 650.00 150.00 420.00 250.00 190.00 2870.00 770.00 42.00 15.00 160.00 441.60 23198.60 144.99 1000 200 gm paneer packet Cost of sealing BOPP tape MC cartons TOTAL TOTAL MFG + PKG COST / KG PROFIT/LOSS SELLING PRICE 200 grm 6.50 0.03 0.00 0.00 6.53 151.52 20.40 171.92 grm 3.75 0.10 0.00 0.00 3.85 148.84 -10.72 138.12 Bulk 0.40 0.00 0.10 0.80 1.30 146.29 -8.17 138.12 Bulk 17400.00 650.00 150.00 420.00 250.00 190.00 2870.00 770.00 42.00 15.00 160.00 441.60 23198.60 144.99
INTERPRETATION: Milk purchase price is 1000 kg milk. PTC/kg (1000*0.75). CC Chilling cost/kg (1000*0.15). CC Transportation/kg (1000*0.42). P&I cost (0.25*1000). Other administrative cost (1000*0.19). Cost of 1 kg KHOA is Rs. 15.57/ Packing cost differs depending upon size & weight of PANEER i.e., for 200 grams its Rs.6.53/-, for 1000 grams its Rs.3.85/- & for Bulk its Rs.1.30/ Total cost includes manufacturing & packing cost per kg. Profit/loss valuation is done depending on per kg. Selling price is also calculated is done depending up on 1kg.
Cost sheet of KHOA as on 27.08.2011 Particulars Milk purchase price PTC/kg CC Chilling cost/kg CC Transportation P & I input cost Other administrative cost General salary Cost of Heating Detergent cost Cost of sugar YIELD in kgs Cost of Direct Labour TOTAL COST PER KG PACKING COST VPP Tixo Tape BOPP Tape DC cartons MC cartons BULK 2088.00 90.00 18.00 49.20 30.00 22.80 258.00 280.00 20.00 0.00 22.00 69.30 2925.00 132.97 0.00 0.00 0.10 0.00 1.00 200 grms 2088.00 90.00 18.00 49.20 30.00 22.80 258.00 280.00 20.00 0.00 22.00 69.30 2925.00 132.97 60.50 0.00 0.00 0.00 1.00
INTERPRETATION: Milk purchase price is 1000 kg milk. PTC/kg (1000*0.75). CC Chilling cost/kg (1000*0.15). CC Transportation/kg (1000*0.42). P&I cost (0.25*1000). Other administrative cost (1000*0.19). Cost of 1 kg KHOA is Rs. 15.57/-
Cost sheet GHEE as on 27.08.2011 PARTICULARS Cost of Butter Fat Conversion cost Cost of film / Tin Cost of M Cartons Rs 21 each 1000 ml 139.35 4.13 1.45 1.75 500 ml 139.35 4.13 1.64 1.75 200 ml 139.35 4.13 2.60 1.75 15 kg Tin 139.35 4.13 5.00 -
INTERPRETATION:
Cost sheet of SALTED BUTTER as on 27.08.2011 500 gm US 162.75 0.00 1.02 4.00 1.54 0.78 0.84 0.11 2.80 0.08 0.35 174.27 180.7 6.43
PARTICULAR Cost of Butter Cost of salt Cost of VPP Rs 130 / kg Cost of DC Cartons Cost of M Cartons Rs 23 each Cost of Gum Tape/Soldiering Direct labour Cost of Maintenance Fixed wages Adm charges Storage charges Total charges SELLING PRICE PROFIT/LOSS
500 gm S 158.82 0.40 1.02 4.00 1.54 0.78 0.84 0.11 2.80 0.08 0.35 170.74 176.52 5.78
100 gm S 158.82 0.40 2.21 8.50 1.54 0.78 0.84 0.11 2.80 0.08 0.35 176.43 178.03 1.60
10 gm S 158.82 0.40 18.78 9.00 1.54 0.78 1.03 0.15 2.80 0.08 0.35 193.73 168.84 -24.89
INTERPRETATION: There are two different types of butter produced by the diary those are salted butter & unsalted butter. The cost sheet for the salted butter is shown in above table where as the cost sheet prepared for the unsalted butter is shown below. Cost of VVP is 130/kg. Cost of M cartons is Rs.21each. Total cost differs depending upon size & weight of salted butter i.e., for 500grms its Rs.170.74/-, for 100grms its Rs.1176.43/-, & for 10grms it is Rs.168.84/ Here selling price is nothing but the agent rate.
Cost sheet of Unsalted Butter as on 27.08.2011 PARTICULAR Cost of Butter Cost of salt Cost of VVP Cost of DC Cartons Cost of M Cartons Cost of Gum Tape/Soldiering Direct labour Cost of Maintenance Fixed wages Adm charges Storage charges Total charges PROFIT/LOSS SELLING PRICE 500 grms 162.75 0.00 1.02 4.00 1.54 0.78 0.84 0.11 2.80 0.08 0.35 174.27 6.43 180.7
INTERPRETATION: Cost of VVP is 130/kg. Cost of M cartons is Rs.21 each. Total cost is 174.27 for 500 grams of unsalted butter. Here selling price is nothing but the agent rate.
CHAPTER IV
A.FINDINGS: Nandini products have a good image in the market. Pricing Strategies of the products are appreciated by its customers. Proper training programs are going on from last few years. Trade union is active. In the diary the co-ordination at all the levels of management is appreciable. Lack of consumer awareness about the wide range of products available. The method of costing adopted by DMU is lengthy & difficult to understand. The growth percentage of the different milk products is not constant, as the demand for toned milk & standards milk is increase day by whereas the demand for shubham milk is decreasing. The demand for Nandini milk Peda in twin cities is less as the Mishra Peda & Thakur Pedas have captured the market. DMU has a waste area of operation which is geographically spread.
B. SUGGESTION: Firstly I would suggest the diary to utilize the whole space available to it. Each & every corner of the infrastructure available should be made use. Increase the advertisement effect of the various milk products produced by the diary especially in the twin cities. They should try hard to increase the sales as all the upcoming activities & opportunities depend up on the sales & profit earned by it. They should try to decrease the cost of the product without making any changes in the quality of the products, as this will automatically increase the profit ratio. They should try to decrease the cost of such as manufacturing, selling & distribution expenses. They should try to come up with many more related products & should try to capture the larger share & the market. They should set the standards for everything for efficient use of resources available & for reducing wastages.
C. CONCLUSION
BIBLIOGRAPHY ANNEXURES
BIBLIOGRAPHY
www.dharwarnin@satyam.net.in www.kmf.com www.nandini.com BIBLIOGRAPHY REFERANCE BOOKS: Marketing research : Tull and Hawkins
: Magazines : Magazines
INTERNET WEBSITES