The Case of a summer Project Report

(1) Cost incurred per office per month:

ASM salary : 20000 Sales Representatives : 24000 Travel Bills and Rent : 16000 Total for an office : 60000 Total cost incurred for seven offices/month=60000*7=420000. (2)Fixed cost incurred to setting up Distribution Channel : 737000

 Selling price of Ghee to distributor= 84.61RS Selling price of SMP to distributor= 78.26 RS Expense/KG of Ghee and SMP
Ghee
Central sales Tax Transportation cost State Sales Tax on Landing price C & F agent Second Leg Freight Total 4 3 5.0 0.42 0.75 13.18

SMP
2.5 3 4.8 0.42 0.75 11.49

Net margin to the company for Ghee =22-13.18= 8.82. Net margin to the company for SMP =18-11.49= 6.51.

 By assuming sales of 4MTS/month Net Margin/office/month : 4000*8.82+4000*6.51=61346.27 Rs.

Cost for each office : 60000 Contribution/office : 1346.27 Total Contribution : 9423.86 Total Fixed Cost : 737000 Time period for breakeven : 737000/9423.86 :78.21 months