Cost Analysis of

BUNTY FOODS INDIA

PVT LTD

1
 Executive Summary

This project is an attempt to give knowledge about Cost Sheet Analysis of Bunty foods india
pvt ltd . 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 BUNTY FOODS INDIA PVT LTD, 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.

2
 CONTENTS

TOPIC PAGE NO

Chapter I...................................................................................8-34

Plan of the Study

1.1 Introduction to topic

1.2 Objective of the study
1.3 Literature review And/or Theoretical Background

Chapter II................................................................................35-43

Company Profile / Industry profile or details

Chapter III................................................................................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................................................................................50-60

Data Analysis and Interpretation

Chapter V.................................................................................61-64

Findings & Conclusions

Chapter VI................................................................................65-66

3
 Suggestion/ Recommendation

BIBLIOGRAPHY..................................................................67

ANNEXURES.....................................................................68-70

4
 Chapter 1
Introduction

MEANING OF COST

5
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. 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 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

6
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

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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.

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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.
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.

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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 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.

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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.

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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.

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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.

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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)
Insurance and lighting of warehouse (f) Insurance of delivery van (g) Expense on
delivery van (h) Salaries of Godownkeeper, drivers and packing staff.

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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.

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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

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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)

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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.

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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.

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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.

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DETERMINATION OF TOTAL COST

Cost of product is determined as per cost attach concept. Total cost of a product consists of
various elements of cost which have the quality of coherence. All the elements of cost can be
grouped and regrouped. Grouping and regrouping of various elements of cost leads to
significant divisions of cost. The logical process of determination of cost by grouping and
regrouping various elements is illustrated as follows:

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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

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 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

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 XXX
WORKS COST

XXX

XXX

Add: Office and Administration Overheads:

XXX
Office Salaries

Directors Fees
XXX
Office Rents And Rates

Office Stationary and Printing XXX

Sundry Office Expenses

XXX
Depreciation on Office Furniture

Subscription to Trade Journals

XXX
Office Lightings

Establishment Charges XXX

Directors Traveling Expenses

XXX
Consultants Fees

Contribution to Provident Fund

XXX
Postage

Legal Charges XXX

Audit Fees

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 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

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 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

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ESTIMATION OF COST

Very often, the management desires to know, „what will be the cost?‟ even before the
production starts. The purpose to know the cost before it is incurred, might be different. It
may be to keep the cost within control or it may be used for profit planning. May times it is
required to submit tenders, to give quotations, to prepare price lists etc. For this purpose the
estimations of “probable cost” of production is essential. This requires the past cost data to be
analysed, present circumstances are taken into consideration and future is projected. The
technique is known as estimation of cost. This involves the study of each and every element
of cost and their nature of behaviour . Keeping in view the nature of behaviour of elements of
cost, it can be classified into following three categories:

FIXED COST

Fixed cost is that cost which remains unaffected even though there is change in the level of
output. It remains constant at all levels of output for a given period of time. Examples 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.

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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 does
not change.

SEMI-VARIABLE COST

This is the third category of nature of behavior of the expenses. These expenses are neither
fixed nor variable. These expenses change in the same direction in which the level of output
changes. Thus these expenses are partly fixed partly variable in nature. Examples 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.

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OBJECTIVES OF THE STUDY

1. This project was undertaken to have an insight into the cost structure of BUNTY FOODS
INDIA PVT LTD

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 BUNTY FOODS INDIA PVT LTD
in controlling the cost.

4. To analyse the cost of advertisement done by BUNTY FOODS INDIA PVT LTD
through cost sheet analysis.

5. To study, how BUNTY FOODS INDIA PVT LTD determine the cost of its
product through cost sheet analysis.

LITERATURE REVIEW

The multi-billion food and beverage industry 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. India's 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

29
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 driven 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, Nestlé, 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 of 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 tonnes in 1990 recording four-fold
increase in 15 years.

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Some of the well-known and most frequented bakeries in the country are Sweet Chariot,
Modern Bakery, Daily Bread in Bangalore, Monginis, Birdie's, 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

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 Chapter 2
Company Profile
BUNTY FOODS INDIA PVT LTD

32
 INTRODUCTION TO BUYNTY FOODS INDIA PVT
LTD

BUNTY FOODS (INDIA) PRIVATE

LIMITED

Bunty Foods (india) Private Limited is a Non-govt company, incorporated on 16 May, 1990. It's a
private unlisted company and is classified as 'company limited by shares'.

Company's authorized capital stands at Rs 100.0 lakhs and has 40.0% paid-up capital which is Rs
40.0 lakhs. Bunty Foods (india) Private Limited last annual general meet (AGM) happened on 30
Sep, 2017. The company last updated its financials on 31 Mar, 2017 as per Ministry of Corporate
Affairs (MCA).

Bunty Foods (india) Private Limited is majorly in Manufacturing (Food stuffs) business from last 34
years and currently, company operations are active. Current board members & directors are
VINOD UTTAMCHAND JASHNANI, RAMESH VARUMAL GAMBANI, KISHORE DHANRAJMAL NICHLANI,
SAGAR ASHOK NICHLANI, AMIT JAWAHARLAL MODI and AAKASH VINOD JASHNANI .

Company is registered in Mumbai (Maharashtra) Registrar Office. Bunty Foods (india) Private
Limited registered address is A 66, ANAND NAGARMIDC ADITIONA,L AMBERNATH THANE MH
421506 IN.

Bunty Foods (India) Private Limited Details

CIN U15432MH1990PTC056552

Date of
Incorporation 16 May, 1990

Status Active

Company
Category Company limited by Shares

Company Sub-
category Non-govt company

Company Class Private

Business
Activity Manufacturing (Food stuffs)

Authorized
Capital 100.0 lakhs

Paid-up Capital 40.0 lakhs

Paid-up Capital
% 40.0

Registrar Office
City Mumbai
33
Registered State Maharashtra

Registration
Number 56552

Registration
Date 16 May, 1990

Listing Status Unlisted

AGM last held on 30 Sep, 2017

OVERVIEW - BUNTY FOODS (INDIA) PRIVATE

LIMITED
Bunty Foods (India) Private Limited is an unlisted private company incorporated on 16
May, 1990. It is classified as a private limited company and is located in Thane,
Maharashtra. It's authorized share capital is INR 1.00 cr and the total paid-up capital is
INR 40.00 lac.

Bunty Foods (India)'s operating revenues range is INR 1 cr - 100 cr for the financial
year ending on 31 March, 2022. It's EBITDA has increased by 22.46 % over the
previous year. At the same time, it's book networth has increased by 108.41 %. Other
performance and liquidity ratios are available here.

The current status of Bunty Foods (India) Private Limited is - Active.

The last reported AGM (Annual General Meeting) of Bunty Foods (India) Private Limited,
per our records, was held on 30 September, 2023.

Bunty Foods (India) Private Limited has six directors - Vinod Uttamchand
Jashnani, Ramesh Varumal Gambani, and others.

The Corporate Identification Number (CIN) of Bunty Foods (India) Private Limited is
U15432MH1990PTC056552. The registered office of Bunty Foods (India) Private Limited
is at Plot no. A-66,A-66/pt,A-66/1& A-66/2, Anand Nagar, Additional Ambernath,
MIDC,, Ambernath East, Thane, Maharashtra.
Balance Sheet
last updated on

34
 FINANCIAL REPORT - BUNTY FOODS (INDIA) PRIVATE LIMITED
Here is a summary of financial information of BUNTY FOODS (INDIA) PRIVATE LIMITED for the financial year
ending on 31 March, 2022.

 Revenue / turnover of BUNTY FOODS (INDIA) PRIVATE LIMITED is INR 1 cr - 100 cr

 Net worth of the company has increased by 108.41 %
 EBITDA of the company has increased by 22.46 %
 Total assets of the company has decreased by -7.32 %
 Liabilities of the company has decreased by -5.09 %

For a detailed balance sheet

Buy fina ncia l re port.

Operating Revenue INR 1 cr - 100 cr

EBITDA 22.46 %

Networth 108.41 %

Debt/Equity Ratio 18.06

Return on Equity 52.02 %

Total Assets -7.32 %

Fixed Assets -14.45 %

Current Assets 15.07 %

Current Liabilities -5.09 %

Trade Receivables -10.66 %

Trade Payables -24.17 %

35
Current Ratio 0.34

5 BIGGEST CHARGES

36
COMPANY NETWORK - BUNTY FOODS (INDIA) PRIVATE LIMITED

History

The company was established in 1892, with an investment of Rs. 295. Initially, biscuits were
manufactured in a small house in central Kolkata. Later, the enterprise was acquired by the
Gupta brothers mainly Nalin Chandra Gupta, a renowned attorney,and operated under the
name of "V.S. Brothers." In 1918, C.H. Holmes, an English businessman in Kolkata, was
taken on as a partner and The Britannia Biscuit Company Limited (BBCo) was launched.
The Mumbai factory was set up in 1924 and Peek Freans UK, acquired a controlling interest
in BBCo. Biscuits were in big demand during World War II, which gave a boost to the
company‟s sales. The company name finally was changed to the current "Britannia Industries
Limited" in 1979. In 1982 the American company Nabisco Brands, Inc. became a major
foreign shareholder.

The 'Biscuit King'

37
Kerala businessman K. Rajan Pillai secured control of the group in the late 1980s, becoming
known in India as the 'Biscuit King'. In 1993, the Wadia Group acquired a stake in
Associated Biscuits International (ABIL), and became an equal partner with Groupe Danone
in Britannia Industries Limited.

In what The Economic Times referred to as one of [India's] most dramatic corporate sagas,
Pillai ceded control to Wadia and Danone after a bitter boardroom struggle, then fled his
Singapore base to India in 1995 after accusations of defrauding Britannia, and died the same
year in Tihar Jail.

Wadia and Danone

The Wadias' Kalabakan Investments and Groupe Danone had two equal joint venture
companies, Wadia BSN and UK registered Associated Biscuits International Holdings Ltd.,
which together held a 51 per cent stake in Britannia. The ABIH tranche was acquired in
1992, while the controlling stake held by Wadia BSN was acquired in 1995. It was agreed

38
that, in case of a deadlock between the partners, Danone was obliged to buy the Wadia BSN
stake at a "fair market value". ABIH had a separate agreement signed in 1992 and was
subject to British law.

Wadia was to be Danone's partner in the food and dairy business, and product launches from
Groupe Danone‟s were expected but never materialised despite the JV being in existence for
over 11 years in India. Under the 1995 joint venture agreement, Danone is prohibited from
launching food brands within India without the consent of the Wadias. In addition, the
partners agreed there would be the right of first refusal to buy out the remaining partner in
the event of the other wishing to sell its holding.

In May 2007, Nusli Wadia told the Ministry of Commerce and Industry that Danone invested
in a Bangalore-based bio nutrition company, Avesthagen, in October 2006 in violation of the
government's Press Note 1, 2005, which requires a foreign company to obtain the consent of
its Indian joint venture partner before pursuing an independent business in a similar area,
including joint ventures based purely on technical collaboration. Danone argued that Press
Note 1 did not apply to it as it did not have a formal technology transfer or trademark
agreement with Avesthagen, and that its 25% holding in Britannia was indirect. Wadia also
filed a case in the Bombay High Court for a breach of a non-competition clause in that
connection. The court ordered Danone not to alienate, encumber or sell shares of Avestagen.

In September 2007, the Foreign Investment Promotion Board of India rejected Danone's
claims that it did not need a non-compete waiver from the Wadias to enter into business in
India alone.

In June 2006, Wadia claimed Danone had used the Tiger brand to launch biscuits in
Bangalore.

After a prolonged legal battle, Danone agreed to sell its 25.48% stake in Britannia to Leila
Lands, which is a Wadia group entity based in Mauritius, and quit this line of business. The
deal was valued at $175–200 m. With this buy-out, Wadia holds a majority stake of 50.96%.

39
Growth and profitability

The company is growing at a steady rate, and is currently profitable. Between 1998 and 2001,
the company's sales grew at a compound annual rate of 16% against the market, and
operating profits reached 18%. More recently, the company has been growing at 27% a year,
compared to the industry's growth rate of 20%.

At present, 90% of Britannia‟s annual revenue of Rs2,200 crore comes from

biscuits. Britannia is one of India's 100 Most Trusted brands listed in The Brand

Trust Report.

Business

Dairy products : Dairy products contribute close to 10 per cent to Britannia's revenue.
Britannia trades and markets dairy products, and its dairy portfolio grew to 47% in 2000-01
and by 30% in 2001-02. Britannia holds an equity stake in Dynamix Dairy and outsources the
bulk of its dairy products from its associate. Its main competitors are Nestlé India, the
National Dairy Development Board (NDDB), and Amul (GCMMF).

Joint venture with New Zealand Dairy: On 27 October 2001, Britannia announced
a joint venture with Fonterra Co-operative Group of New Zealand, an integrated dairy
company from procurement of milk to making value-added products such as cheese and
buttermilk. Britannia planned to source most of the products from New Zealand, which they
would market in India. The joint venture will allow technology transfer to Britannia.
Britannia and New Zealand Dairy each holding 49% of the JV, and the remaining 2 per cent
held by a strategic investor. Britannia has also tentatively announced that its dairy business
would be transferred and run by the joint venture.

40
The authorities' approval to the joint venture obliged the company to start manufacturing
facilities of its own. It would not be allowed to trade, except at the wholesale level, thus
pitching it in competition with Danone, which had recently established its own dairy
business.

Biscuits

Britannia Little Hearts

The company's factories have an annual capacity of 433,000 tonnes. The brand names of
biscuits include VitaMarieGold, Tiger, Nutrichoice Junior,Good day, 50 50, Treat, Pure
Magic, Milk Bikis, Good Morning, Bourbon, Thin Arrowroot, Nice, Little Hearts and many
more.

Tiger, the mass market brand, realised $150.75 million in sales including exports to countries
including the U.S. and Australia, or 20% of Britannia revenues in 2006.

In a separate dispute from the shareholder matters, the company alleged in 2006 that Danone
had violated its intellectual property rights in the Tiger brand by registering and using Tiger
in several countries without its consent. Britannia claimed the company found out that
Danone had launched the Tiger brand in Indonesia in 1998, and later in Malaysia, Singapore,
Pakistan and Egypt, when it attempted to register the Tiger trademark in some of these
countries in 2004. Whilst it was initially reported in December 2006 that agreement had been
reached, it was reported in September 2007 that a solution remained elusive. In the meantime
since Danone's biscuit business has been taken over by Kraft, the Tiger brand of biscuits in
Malaysia was renamed Kraft Tiger Biscuits in September 2008.

Britannia initiated legal action against Danone in Singapore in September 2007. The dispute
was resolved in 2009 with Britannia securing rights to the Tiger brand worldwide, and
Danone paying Rs 220 million to utilise the brand.

41
BRITANIA DAILY FRESH BREAD

Till 1958, there were no breads in the organized sector and bread consumption was a habit
typified by the British. Then, a mechanised bread unit was set up in Delhi with the name
"Delbis" which produced sliced bread and packed it under the Britannia name. Thus,
Britannia was not only the pioneer, but also inculcated in the people of Delhi the habit of
eating white sliced bread.

The Mumbai unit came up in 1963, and there again Britannia was the first branded bread in
the city. From a company offering 2 packs - the 400gm and the 800gm plain white sliced
bread - Britannia has evolved into a company offering 22 packs, catering to a variety of taste
and price segments in the bread consuming market. The last couple of years also saw the
introduction of Whole Wheat Bread as a part of "Eat Healthy, Think Better" credo.

Britannia Daily Fresh Bread, which finds its way to over 6 lakh households daily, is the
mainstay of the company‟s non-biscuit business at present. Britannia hopes to drive this
emerging business through the exploding modern trade and has already gained access to
Reliance Retail, Trinethra and Fabmall for its breads. Britannia is widely recognized as an
innovative marketer.

42
 Chapter-3
Research
Methodology

43
Research methodology

Research methodology is a way to systematically, solve the research problem. It may be

understood as a science of study how research is done. In this we study the various steps (the
research process) that are generally adopted by a researcher in studying his research problem
along with the logic behind them. The basic steps in this research are also as following:

Steps in planning a research study:

 Formulating a research problem.
 Conceptualizing a research design.
 Constructing an instrument for data collection.
 Selecting a design.
 Writing a research proposal.

Steps in conducting a study:

 Collecting the data.
 Processing data.
 Writing a research project

Research design

Research design is a plan outlining how information is to be gathered for an assessment or

evaluation that includes identifying the data gathering methods, the instruments to9 be used
or created, how the instruments will be administered, and how the information will be
organized and analyzed.

The preparation of the research design, appropriate for a particular research problem,
involves usually the consideration of the following:

44
  The means of obtaining the information;

 The availability and skills of the researcher and his staff (if any);

 Explanation of the way in which selected means of obtaining information will be

organized and the reasoning leading to the selection;

 The time available for research; and

 The cost factor relating research, i.e., the finance available for the purpose.

Data collection
In dealing with any real lift problem it is often found that data at hand are inadequate, and
hence, it becomes necessary to collect data that are appropriate. There are several ways of
collecting the appropriate data which differ considerably in context of money costs, time and
other resources at the disposal of the researcher.

There are two types of Data:

 Primary data: Primary data is important for all areas of research because it is
unvarnished information about the results of an experiment or observation. It is like
the eyewitness testimony at a trial. No one has tarnished it or spun it by adding their
own opinion or bias so it can form the basis of objective conclusions. Primary data
is the specific information collected by the person who is doing the research. It can
be
45
 obtained through clinical trials, case studies, true experiments and randomized
controlled studies. This information can be analyzed by other expects who may
decide to test the validity of data by repeating the same experiments.

 Secondary data: Secondary data is data collected by someone other than user.
Common sources of secondary data for social science include censuses, surveys,
organizational records and data collected through qualitative methodologies or
qualitative research. Primary data, by –contrast, are collected by the investigator
conducting the research. Secondary data analysis saves time that would otherwise be
spent collecting data and, particularly in the case of quantitative data, provides
larger and higher-quality databases than would be unfeasible for any individual
researcher to collect on their own. In addition to that, analysts of social and
economic change consider secondary data essential, since it is impossible to conduct
a new survey that can adequately capture past change and/or developments.

 But my research concerned with secondary data only.

Secondary data

Secondary data is the data that have been already collected by and reality available from
other sources. Such data are cheaper and more quickly obtainable than primary data and also
may be available when primary data cannot be obtained at all.

Advantages of secondary data

 It is economical. It saves efforts and expenses.

 It is time saving.

46
  It helps to make primary data collection more specific since with the help of
secondary data we are able to make out what are gaps and deficiencies and
what additional information needs to be collected.

 It helps to improve the understanding of the problem.

 It provides a basis for comparison for the data that is collected by the researcher.

Disadvantages of secondary data

 Secondary data is something that seldom fits in the framework of the
marketing research factors.

 Accuracy of secondary data is not known.

 Data may be outdated.

Sources of data collection

 Website

 Books

 Magazines

 News

Limitations of study

1. The project is only based on secondary data.

2. Time and cost play major role in the development of a project.

47
48
 Chapter 4
Data Collection &
Analysis

49
SWOT Analysis

SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a project or in a business venture. It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieve that objective. The technique is
credited to Albert Humphrey, who led a convention at Stanford University in the 1960s and
1970s using data from Fortune 500 companies.
A SWOT analysis must first start with defining a desired end state or objective. A SWOT
analysis may be incorporated into the strategic planning model. Strategic Planning has been
the subject of much research.

1- Strengths: characteristics of the business or team that give it an advantage over others
in the industry.
2- Weaknesses: are characteristics that place the firm at a disadvantage relative to
others.
3- Opportunities: external chances to make greater sales or profits in the environment.
4- Threats: external elements in the environment that could cause trouble for the
business.

50
Strengths:

1- Wide Distribution network all round the globe.

2- Britania acquired 50% stake in Daily Bread
3- Britania has presence in around 60 countries across the world.
4- Britania is the world‟s largest Bread manufacturer. Britannia is the 2nd most trusted
brand
5- Provides good quality of biscuits cakes
6- Products range from Re1 to Rs 500
7- Easily available in various forms
8- Excellent supply of products whenever required
9- Widely accepted in all generations

Weaknesses:

1- Quantity of biscuits is less compare to its competitors, as they concentrate more on

quality.

2- Similar kind of Britannia product available in the market made by its competitors

51
Opportunities:

1- Bakery industry growing at 40% per annum.

2- All major firms are now supplying fast food at work spot.
3- Bread is now becoming staple food. With the opening of new offices in the different
areas scope of sale of products will increase.
4- Generate employment opportunity.

Threats:

1- Unorganised Bakery firms operating in rural areas

2- Raw material cost increasing due to inflation
3- Huge Competition in the market. Companies like Biskfirm, Parle , Sunfeast entering
into this segment of market
4- Providing products to the offices at lesser rates by offering heavy discounting.

52
 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

53
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

54
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

55
 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.

56
 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.

57
 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

58
 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:

59
The Profit arise out of selling per unit of the product is 11.603% of the total per unit cost
price

Chapter 5
Findings & Conclusions

60
Finding The Study:

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
61
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 BUNTY FOODS INDIA PVT LTD 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.

62
 Chapter-6
Suggestion

Suggestions:
1- The amount of direct as well as indirect labor should be decreased from Rs. 0.122 per
unit to Rs. 0.1 in order to decrease the per unit cost.

2- The average Salary paid to the sales people should be maximized in order to motivate
the sales personnel in order to maximize the sales in the market.

3- As a part of encouragement for sales people, they should be given a commission of 8

% instead of 5% of the total sales done by them in order to maximize sales and
production and decreasing cost per unit.

63
 BIBLIOGRAPHY

Internet: Websites

1- http://www.m4bfinance.com/costing- cost-sheet-analysis

2- http://www.britannia.co.in/dairy.htm

3- http://www.scribd.com/doc/19636482/Cost-Analysis-of-Britania-Bread

64
Journals:

1- Bettis, R.A& hit, M.A (1995) “The new competitive landscape”, the cost
management journal, Volume 16, Page no. 7-19.
2- Volkmann, Roger J., and Ronald H. Gorman. "The Influence of Cost on the
production process." Journal of Management Studies. 35.1 (1998): 105-121.

65
Annexure
(Cost Sheet)

66
 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

67
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

68
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

69
70