Professional Documents
Culture Documents
Cost Analysis of Britania Bread PDF
Cost Analysis of Britania Bread PDF
COST ANALYSIS OF
BRITANNIA BREAD
CERTIFICATE
Cost Analysis - Britannia Bread
This is to certify that the Project titled: Cost Analysis of Britannia Bread has been
submitted by:
• Atul Ratnapakhi
• Reshma Rasal
• Sheetal Rathod
• Sneha Patil
• Vikas Rathod
• Vineet Saraf
Towards fulfillment of the requirement of PGDM course 2008 – 2010 and has been
carried out under the guidance of Prof. Jayesh Jain at the Indian Education
Society’s Management College & Research Centre.
The information submitted is true and original to the best of our knowledge
_____________
Guide:
Place:
Date:
------------------------------
2 | Page
Cost Analysis - Britannia Bread
DECLARATION
3 | Page
Cost Analysis - Britannia Bread
ACKNOWLEGDEMENT
One is filled with great sense of pride when students are able to distinguish themselves
in works, even beyond the four walls of the classroom.
This work is synergistic product of our mind. We are grateful to many Tran generational
source and roots of wisdom that helped us to make this project viable and also on the
right time. The material and arrangement has slowly evolved and has imbued those
who has deeply and sincerely immersed in it.
We are very grateful to Prof. Jayesh Jain for giving us the fine opportunity by making
us move out of the four walls of classroom and taking the practical look.
I am indebted to IES Management College and Research Centre and University of
Mumbai for this golden chance
4 | Page
Cost Analysis - Britannia Bread
Index
5 | Page
Cost Analysis - Britannia Bread
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 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.
6 | Page
Cost Analysis - Britannia Bread
BAKERY INDUSTRY
7 | Page
Cost Analysis - Britannia Bread
BREAD
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
8 | Page
Cost Analysis - Britannia 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.
9 | Page
Cost Analysis - Britannia 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.
10 | P a g e
Cost Analysis - Britannia Bread
SWOT ANALYSIS OF
BRITANNIA BREAD
11 | P a g e
Cost Analysis - Britannia Bread
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
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
12 | P a g e
Cost Analysis - Britannia Bread
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
14 | P a g e
Cost Analysis - Britannia Bread
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:
15 | P a g e
Cost Analysis - Britannia Bread
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.
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.
• Other factory expenses: Other factory expenses include maintenance of factory and
other miscellaneous expenses.
• Office and general expenses: This comprises of refreshments (tea and snacks),
Postage and Telegrams and other petty expenses.
16 | P a g e
Cost Analysis - Britannia Bread
• Printing and stationary: This consists of photocopy charges, printouts and other
stationary items.
• Electricity and lightings: It consists of office lighting and air conditioning 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:
17 | P a g e
Cost Analysis - Britannia Bread
The Profit arise out of selling per unit of the product is 11.603% of the total per unit cost
price
CONCLUSION
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.
Today a variety of breads are available, such as brown bread, whole wheat bread,
chutney bread, etc.
18 | P a g e
Cost Analysis - Britannia Bread
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.
Bibliography
Online Sources
• www.britannia.co.in
• www.google.com
• www.wadiagroup.com
• www.capitaline.com
19 | P a g e
Cost Analysis - Britannia Bread
20 | P a g e