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    Costing Maggi PDF

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    Poorvi Singhal
    The document discusses the break-even analysis of a proposed 100 tonne per year capacity plant for producing Cup Maggi noodles. It outlines the fixed costs which would include land and building at Rs. 3,10,000, plant and machinery at Rs. 3,90,000, and utilities at Rs. 1,10,000 for a total fixed cost of Rs. 8,60,000. Variable costs per tonne of production include manpower requirements of Rs. 24,000, raw and packing materials of Rs. 90,000, and selling expenses estimated at 30% of total sales. The break-even analysis will determine the minimum production level required for the plant to operate at neither a loss nor profit.

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    Costing Maggi PDF

    Uploaded by

    Poorvi Singhal
    5K views3 pages
    The document discusses the break-even analysis of a proposed 100 tonne per year capacity plant for producing Cup Maggi noodles. It outlines the fixed costs which would include land and building at Rs. 3,10,000, plant and machinery at Rs. 3,90,000, and utilities at Rs. 1,10,000 for a total fixed cost of Rs. 8,60,000. Variable costs per tonne of production include manpower requirements of Rs. 24,000, raw and packing materials of Rs. 90,000, and selling expenses estimated at 30% of total sales. The break-even analysis will determine the minimum production level required for the plant to operate at neither a loss nor profit.

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    The document discusses the break-even analysis of a proposed 100 tonne per year capacity plant for producing Cup Maggi noodles. It outlines the fixed costs which would include land and building at Rs. 3,10,000, plant and machinery at Rs. 3,90,000, and utilities at Rs. 1,10,000 for a total fixed cost of Rs. 8,60,000. Variable costs per tonne of production include manpower requirements of Rs. 24,000, raw and packing materials of Rs. 90,000, and selling expenses estimated at 30% of total sales. The break-even analysis will determine the minimum production level required for the plant to operate at neither a loss nor profit.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    5K views3 pages

    Costing Maggi PDF

    Uploaded by

    Poorvi Singhal
    The document discusses the break-even analysis of a proposed 100 tonne per year capacity plant for producing Cup Maggi noodles. It outlines the fixed costs which would include land and building at Rs. 3,10,000, plant and machinery at Rs. 3,90,000, and utilities at Rs. 1,10,000 for a total fixed cost of Rs. 8,60,000. Variable costs per tonne of production include manpower requirements of Rs. 24,000, raw and packing materials of Rs. 90,000, and selling expenses estimated at 30% of total sales. The break-even analysis will determine the minimum production level required for the plant to operate at neither a loss nor profit.

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    of 3

    5.

    FINANCIALS

    5.1 BREAKEVEN ANALYSIS OF A 100 TONNE CAPACITY PLANT


    OF CUP O MAGGI NOODLES
    In this analysis we will look for the different costs involved in the production of Maggi cup
    noodles and then comparing it with the total sales to find out the minimum efficiency at which
    the plant should operate in order to have a neither loss nor profit relationship. This is done by
    finding the Break-Even point of operation. If the plant operates at the efficiency higher than
    that indicated by the Break-Even point than the plant operates at a profit and vice-versa.

    5.1.1 BREAK-EVEN ANALYSIS

    The cost involved in the production can be divided into two categories viz. fixed cost and
    variable cost. They can be defined as

    Fixed cost: This is the cost which is independent of the quantity of the product produced e.g.
    Land &Building cost, plant & Machinery cost etc.

    Variable Cost: this is the cost that varies with per unit of product produced e.g. Raw material
    cost, packaging cost etc.
    The break up of the various costs is shown below

    1. Fixed Cost

    A. Land and Building

    A plot of land of about 200 sq.mtrs. with built-up area of 100 sq.mtrs. is sufficient. Land
    would cost around Rs.60,000/- whereas cost of construction could be Rs.2.50 lacs. Main
    production area would occupy around 50 sq.mtrs. whereas packing room and storage area
    would occupy balance area.

    Particulars Area (sq. mtrs.) Cost (Rs.)


    Land 200 60,000
    Building 100 2,50,000
    TOTAL 3,10,000

    B. Plant and Machinery

    Marketing is the key success determinant and the production capacity has to be finalized
    accordingly. Keeping in mind the financial viability, the rated production capacity is assumed
    to be 100 tonnes per year with 300 working days and 2 shifts per day.
    This would necessitate installation of following machines:

    Item Qty. Price (Rs)

    Extrusion Machine 1 1,00,000


    Pre-conditioner 1 80,000
    Mixer ( 50 kgs capacity) 1 1,00,000
    Pouch Packing and Sealing 1 1,00,000
    Machine
    Weighing Scale 1 10,000
    TOTAL 3,90,000

    C. Miscellaneous Assets

    Other assets like furniture and fixtures, storage facilities, working tables, SS utensils, etc.
    would call for expenditure of Rs. 50,000/-.

    D. Utilities

    Power requirement shall be 20 HP whereas per day water requirement would be 500-550
    liters. Annual expenditure at full capacity utilization will be Rs. 1,10,000/-.

    2. Variable costs

    A.MANPOWER REQUIREMENTS

    Particulars Nos. Monthly Total Monthly


    Salary (Rs) Salary (Rs)
    Machine Operators 2 4,000 8,000
    Skilled Workers for 2 3,000 6,000
    Packing
    Semi-skilled Workers 2 2,000 4,000
    Helpers 2 1,000 2,000
    Salesman 2 2,000 4,000
    Total 24,000

    B. Raw and Packing Materials

    Noodles are made with the help of many ingredients with major input being wheat flour.
    Other materials required are corn and rice flour, protein isolates, salt, spices, edible oil,
    preservatives etc. All of them are easily available. Packing materials are equally important.
    Colourful and attractive pouches shall have to be printed and outer packing will be corrugated
    boxes.
    This cost can be shown as

    Product Qty. Price/Ton Value


    (Tonnes) (Rs.)

    Raw Material 100 70,000 70,00,000

    Packing Material 100 @ Rs.20,000/ Ton of 20,00,000


    Finished Goods
    Total 90,00,000

    C. Selling Expenses

    Marketing will be a key element. Expenses shall have to be incurred on transportation,


    Publicity in local media like newspapers, hoardings and TV scroll, selling commission, free
    Sampling etc. A provision of 30% of sales value is made every year to take care of these
    Expenses since the product is new thus more emphasis is given on this section. This expense
    can be reduced once the product is well established in market.

    FINAL TOTAL COST ANALYSIS

    FIXED COSTS In Rs.


    Land and Building 3,10,000
    Plant and Machinery 3,90,000
    Miscellaneous Assets 50,000
    Utilities 1,10,000
    TOTAL FIXED COST 8,60,000
    VARIABLE COSTS Per tonne of production
    Manpower Requirements 24,000
    Raw and Packing Materials 90,000
    Selling Expenses @ 30% of Total sales

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