Cost Sheet Analysis of Britania Essay Example

Cost Sheet Analysis of Britania Essay Example Cost Sheet Analysis of Britania Essay Cost Sheet Analysis of Britania Essay Affiliated to Guru Gobind Singh Indraprastha University, Delhi 2A amp; 2B, Madhuban Chowk, Outer Ring Road, Phase-1, Delhi-110085 Cost Sheet Analysis of Britannia Bread STUDENT s DECLARATION This is to certify that I have completed the Project titled COST SHEET ANALYSIS OF BRITANNIA BREAD under the guidance of Ms. NITIKA SHARMA in the partial fulfillment of the requirement for the award of the degree of Bachelor in Business Administration from Rukmini Devi Institute of Advanced Studies, New Delhi. This is an original work and I have not submitted it earlier elsewhere.Name of the Student – RINKI KHATRI Enrollment No. 03515901711 Class amp; Section- BBA – SEMESTER 3 CERTIFICATE OF GUIDE This is to certify that the project titled COST SHEET ANALYSIS OF BRITANNIA BREAD is an academic work done by RINKI KHATRI submitted in the partial fulfillment of the requirement for the award of the degree of Bachelors in Business Administration from Rukmini Devi Institute of Advanced Studies, New Delhi. under my guidance and direction. To the best of my knowledge and belief the data and information presented by him / her in the project has not been submitted earlier elsewhere.Name of the Faculty – NITIKA SHARMA Designation of the Faculty RDIAS ACKNOWLEDGEMENT I offer my sincere thanks and humble regards to Rukmini Devi Institute Of Advanced Studies, GGSIP University, New Delhi for imparting us very valuable professional training in MBA. I pay my gratitude and sincere regards to Ms. Nitika Sharma, my project Guide for giving me the cream of his knowledge. I am thankful to him as he has been a constant source of advice, motivation and inspiration. I am also thankful to him for giving his suggestions and encouragement throughout the project work.I take the opportunity to express my gratitude and thanks to our computer Lab staff and library staff for providing me opportunity to utilize their resources for the completion of the project. I am also thankful to my family and friends for constantly motivating me to complete the project and providing me an environment which enhanced my knowledge. Name of the Student – Rinki Khatri Enrollment No. 03515901711 Class amp; Sec – BBA-2-3 SEMESTER Executive Summary This project is an attempt to give knowledge about Cost Sheet Analysis of Britannia Bread. It aims to make its reader well versed with each and every aspects of Britannia Bread.It throws light on the following:- 1) In 1st chapter you will find the introduction of the project report and its objective. 2) In 2nd chapter you will find the introduction of Britannia Company, its history 3) In 3rd chapter, you will find the research methodology used in the project report. 4) In 4th chapter you will find how data is collected and its analysis. 5) In 5th chapter there are findings and conclusion about 5the project report. 6) In 6th chapter you will find some suggestions about the project. CONTENTS TOPIC PAGE NO Chapter I †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 8-34 Plan of the Study . 1Introduction to topic 1. 2 Objective of the study 1. 3 Literature review And/or Theoretical Background Chapter II†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 35-43 Company Profile / Industry profile or details Chapter III†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦44-49 Research Methodology 3. 1 Purpose of the study 3. 2 Research Objectives of the study 3. 3 Research Methodology of the study 3. 3. 1 Research Design 3. 3. 2 Data Collection 3. 3. 3Method of data collection 3. 3. 4Limitations Chapter IV†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦50-60 Data Analysis and Interpretation Chapter V†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 61-64 Findings amp; Conclusions Chapter VI†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦65-66Suggestion/ Recommendation BIBLIOGRAPHY†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 67 ANNEXURES†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 68-70 Chapter 1 Introduction MEANING OF COST COST’ repr esents 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.By cost, we mean the actual cost i. e. historical cost. ICWA (UK) defines cost as the amount of expenditure (actual or notional) incurred on, or attributable to a specified thing or activity. 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 COSTIt 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 rocess. 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. Some of the items like nails or thread in the store are a part of finished product. They are not treated as direct materials in view of negligible cost. 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 are also as productive labour, process labour or prime cost labour. 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 EXPENSESIt 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 3. Some minor items such as thread in dress making, cost of nails in shoemaking etc INDIRECT LABOUR 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 EXPENSESIt 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 nons of such costs are rent, rated and taxes of factory premises, salary of general manager, foreman, watchman, insurance, depreciation etc. These expenses incur according to the unit of time and not according to level of production. Hence sometimes it is called as periodic cost.For example such fixed cost is ascertained of a particular concern Rs. 12000 pm. The capacity of this concern is to produce 1000 units pm. If they produce 100 units or 500 units or 700 units or 100 units the fixed cost will remain constant at all these levels of output. This fixed cost remains fixed at all levels of output, but the cost per unit changes if there is a change in the level of output. VARIABLE COST It is the cost which tends to vary directly with the volume of output. If there is increase in output this cost increases and vice versa. The change in the variable cost takes place in the same direction in which the level of output changes.This cost consists of direct materials, direct wages, direct expenses and some part of indirect expenses which varied according to the level of output. Say for example if standard unit of final product requires the raw materials of Rs. 20 per unit the expenses on direct materials will change if level of output changes. However variable cost per unit will remain unchanged provided the price level d oes not change. SEMIs of such expenses are depreciation of plant and machinery, maintenance of factory building etc.These expenses will increase if factory is run from single shift to double or triple shifts. Depreciation and maintenance will increase but not in the same ratio, the output increases. Thus these expenses are neither fixed nor variable cent percent. Hence they are called as semi variable expenses. OBJECTIVES OF THE STUDY 1. This project was undertaken to have an insight into the cost structure of Britannia. 2. The objective of cost sheet analysis is to determine the cost and with this cost we can find profit margin for the Britannia. 3. To study how cost sheet analysis is helping the Britannia Company in controlling the cost. 4. To analyse the cost of advertisement done by Britannia Company through cost sheet analysis. 5.To study, how Britannia Company determine the cost of its product through cost sheet analysis. LITERATURE REVIEW The multi-billion food and beverage i ndustry comprises several markets including bakery products such as bread, biscuits etc. , milk and dairy products, beverages such as tea, coffee, juices, bottled water etc. , snack food, chocolates, etc. beverage, confectionery, processed foods and others. Indias Food and Beverage industry is valued at Rs. 3584 billion. India produces above 600 million tonnes of food products every year and is one of the major producers of food in the world. The food and beverage industry registered a growth rate of 8. 5% in 2005-06.With increase in disposable income of consumers, growing awareness among consumers about health products, rapid urbanization, and increasing popularity of convenience foods, food and beverage sector is expected to grow at a high rate. This sector holds a huge potential to grow because of the increase in advertisement spending, awareness campaign about products in urban as well as rural areas, and large scale transformation. The food and beverage industry is primarily dr iven by consumer health trends. Presently, the food and beverage industry is in a dynamic phase, marked by a high degree of competition. As product development within the food and beverage market moves towards a focus on health and nutrition, the growth and development of food manufacturers in the market depends on having prudent strategies in place, which can be applied globally.In effect, this has created a highly competitive market place, which fosters growth of participants with a clear vision of growing with their customers. The major players in the Food and Beverage Industry is: Heinz, Mars, Marico, Conagra, Pepsi, HLL, Pillsbury, Nestle, Amul, ITC, Dabur, Britannia, Cadbury, Smith Kline Beecham, The Surya Food and Agro Private Ltd. Bakery industry in India is probably the largest among the processed food industries, production of which has been increasing steadily in the country. Bakery products once considered as sick man’s diet have now become essential food items o f the vast majority of population. The two major bakery industries, viz. bread and biscuit account for about 82% of the total bakery products. The annual production of bakery products which includes bread, biscuits, pastries, cakes, buns, rusk, etc. , most of which are in the unorganized sector, is estimated to be in excess of 3 million tonnes. The production of bread and biscuits in the country both in the organized and unorganized sectors is estimated to be around 1. 5 million tonnes and 1. 1 million tonnes respectively. Of the total production of bread and biscuits, about 35% is produced in the organized sector and the remaining is manufactured in the unorganized sector. Indian Bakery sector is indicating significant growth both in terms of volumes and customer base.The sector, which is estimated at Rs 3,500 crore, is currently registering a 40% growth according to industry sources. The production of Bakery products has increased from 5. 19 lakh tonnes in 1975 to 18. 95 lakh tonn es in 1990 recording four-fold increase in 15 years. Some of the well-known and most frequented bakeries in the country are Sweet Chariot, Modern Bakery, Daily Bread in Bangalore, Monginis, Birdies, Croissants in the west, and in the north and eastern parts of the country, there are quite a few big players too. Bread is the cheapest and basic instant food available for consumption. Though bread is not a staple food in the country, its consumption has increased over the years.In India it is still a secondary staple food when compared to chapatti, puri or rice. The different types of bread available are White bread, Whole meal or whole wheat bread, mixed grain bread, Kibbled wheat and cracked wheat bread, Fibre-increased white breads, Rye bread 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 Companys 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. Britannias 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 amp; Company Limited, U. K. , a leading biscuit manufacturing company, and further strengthened its position by expanding he 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 th e 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 Parrys during the year 1975. In 1976, the company had introduced Britannia bread in Calcutta and Chennai.During the year 1978, the company made Public issue, in that Indian shareholding crossed 60%. The Company re-christened from Britannia Biscuit Company Limited to Britannia Industries Limited with effect from 3rd October of the year 1979. The Company had signed a 10-year technical collaboration agreement with Nebico Pvt Ltd. , Nepal during the year 1980 for the supply of know-how relating to manufacturing, packaging and marketing of biscuits and selection of plant and machinery. Durin g the year 1989, BILs Executive Office was relocated to Bangalore. During the year 1990, two new brands of biscuits, Elaichi Creamand and Petit Beurre were launched.Also, in the same year a new cashew badam variant of the brand Milk Bikis and brand extension of pure magic biscuit Vanilla cream were launched, Fruit bread was launched in Delhi. The Company launched two new speciality brands in the year 1991 viz. , Britannia milk bread and Britannia brown bread in Delhi and extended nationally its main brands Petit Beurre and Elaichi Cream. In 17th August of the year 1991, the Company handed over its Soya unit at Vidisha, MP to SM Dychem Ltd. BIL had celebrated its Platinum Jubilee in the year 1992. After a year in 1993, Wadia Group had acquired the stake in ABIL, UK and becomes an equal partner with Group Danone in BIL.The Company was in re birth phase during the year 1997, new corporate identity Eat Healthy, Think Better leads to new mission of Make every third Indian a Britannia con sumer and in the same year BIL entered into the dairy products market. In 1998, BIL had launched Half/Half, a soft cake filled with cream in two variants, chocolate-vanilla and vanilla-orange. The Company had rolled out its flavored milk brand Zip-Sip in tetrapaks in the year 1999. Zip-Sip had been launched in Mumbai and some markets in the South. Forbes Global Ranking was rated the company during the year 2000, Britannia among Top 300 small companies. In the same year, the company had launched Britannia Milkman Butter, a product under the Milkman brand.BIL made its fund in-principle agreement to acquire 49 per cent of Kwality Biscuits in the year 2001 through internal accruals. During the year 2002, the company had entered into a joint venture with the Fonterra Cooperative Group, New Zealands biggest company and one of the leading diary co-operative groups in the world and the Britannia New Zealand Foods Pvt. Ltd was born. Pure Magic, the companys product was winner of the Worldsta r, Asiastar and Indiastar award for packaging in the same year 2002. After a year, in 2003, BIL had launched Treat Duet, most successful of the year and Britannia Khao World Cup Jao rocks the consumer lives yet again.During the year 2004, Britannia accorded the status of being a Superbrand and the brand Good Day added a new variant Choconut in its range. Reviewed marketing alliance with the Kolkata-based Thacker Dairy Products Pvt Ltd. In the year 2005, Britannia New Zealand had launched health drink for adult. The new plant in Uttaranchal, commissioned during the year 2005, it was ahead of schedule. In the same year, launched yet another exciting snacking option the Britannia 50-50 Pepper Chakkar. BIL had forged a strategic alliance with CCD Daily Bread Pvt Ltd in the year 2006, a Bangalore based Company engaged in manufacturing and retailing of premium breads, cakes snacks and high end ready to eat foods.In the year 2007, Britannia industries formed a joint venture with the Khimji Ramdas Group and acquired a 70 percent beneficial stake in the Dubai-based Strategic Foods International Co. LLC and 65. 4% in the Oman-based Al Sallan Food Industries Co. SAOG. The company was rated as the No 1 Most Trusted Food Brand in a survey conducted by AC Nielsen ORGO-MARG and published in Economic Times in the year 2007. Britannia launched Iron fortified Tiger Banana biscuits, Good Day Classic Cookies, Low Fat Dahi and renovated MarieGold during the period of 2008. BIL was ranked 27th place in the list of Indias Fastest Growing Large Companies by Business Today, Special on June of the year 2008. The story of one of Ind