COST ANALYSIS OF AMUL

Project on

Cost Analysis of Amul

In partial fulfilment for the requirements of Cost Accounting course in the Two Year Full-
time Master of Business Administration Programme,

GLS University.

Submitted by

Khushi Dave 202000620010514

Aditya Hedao 202000620010534
Dhruvee Patel 202000620010605
Sakshi Supekar 202000620010689
Asfina Sutar 202000620010690
Dhruv Vyas 202000620010719

Submitted To:

Prof. Tanay Shah

Assistant Professor

Submitted On:

10th June, 2021

FACULTY OF MANAGEMENT

GLS University

PREFACE

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 COST ANALYSIS OF AMUL

Before building a new plant or taking on a new project, prudent managers conduct a cost benefit analysis to
evaluate all the potential costa and revenues that a company might generate from the project. The outcome
of the analysis will determine whether the project is financially feasible or if the company should pursue
another project. A cost analysis is a systematic process that businesses use to analyse which decisions to
make and which to forgo. The cost benefit analysis sums the potential rewards expected from a situation or
action and then subtracts that total costs associated with taking that action.

ACKNOWLEDGEMENT

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 COST ANALYSIS OF AMUL

With immense please we are presenting COST ACCOUNTING Project report as part of the curriculum of
'Masters of Business Administration'. We wish to thank all the people who gave us unending support.

We express our profound thanks to Prof. TANAY SHAH our project guide and all those who have
indirectly guided and helped us in preparation of this project.

We also like to extend our gratitude to all staff and our colleagues of College of Management, who provided
moral support, a conductive work environment and the much-needed inspiration to conclude the project in
time and a special thanks to my group members who are integral part of the project.

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 COST ANALYSIS OF AMUL

Table of contents

Sr. No. Page No.

1. Introduction about Company 5
2. Introduction about Costing method
3. Cost-Sheet
4. Recommendations
5. Conclusion
6. References

Cost sheet of Amul Milk for the year 2019:

PARTICULAR PER UNIT AMOUNT (IN LAKHS)

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 COST ANALYSIS OF AMUL

OPENING STOCK OF RAW MATERIAL 0.7317 8813.59

ADD : Milk Cost 36.6300 441208.78

Milk Transportation Cost 0.8331 10035.33
LESS : CLOSING STOCK OF RAW 0.7860 9467.41
MATERAIL
RAW MATERIAL CONSUMED 37.4089 450590.29
ADD: Direct Charges 12.8350 154597.98
PRIME COST 50.2439 605188.27
ADD : FACTORY OVERHEAD
Power and Fuel 1.0001 12047.30
Labour Expenses 1.1528 13885.78
Stores and Consumables 0.1380 1662.59
Transportation Expense (Inward Freight) 0.8416 10138.22

Other Manufacturing Expense 0.3044 3666.98

3.4371 41400.87
WORK COST INCURRED 53.6811 646589.14
ADD : OPENING STOCK OF WIP 0.9990 12032.97
CLOSING STOCK OF WIP 1.0838 13055.09
WORK COST 53.5962 645567.02
ADD : ADMINISTRATIVE OVERHEAD

Rent, Rate and Tax 0.0871 1049.21

Postage, Telephone, Printing and 0.0152 183.31
Stationery
Travelling and Conveyance Expense 0.0330 398.485

Legal and Professional Charges 0.0212 256.41

Repair and Maintenance Expense 0.4018 4839.84
General Expense 0.0811 977.05
Insurance Expense 0.0293 353.68
Audit fees (Statutory Audit Fees) 0.0324 391.45
Co-operative and Breed Development 27.7369 3340.91

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 COST ANALYSIS OF AMUL

Employee Benefit Expense 1.1594 13965.16

Finance Cost 0.8279 9973
Depreciation 0.8797 10597
3.8460 46325.505
OFFICE COST 57.4423 691892.525
ADD : OPENING STOCK OF FINISHED 4.0336 48585.41
GOODS
LESS : CLOSING STOCK OF FINISHED 4.1778 50321.73
GOODS
COST OF PRODUCTION 57.2981 690156.205
ADD : SELLING & DISTRIBUTION
OVERHEADS
Transportation Outward Expense 0.2417 2911.86
Crate Expense 0.0244 294.24
Advertisement/Sales Promotion 0.0161 194.27
Agmark, BIS and ISO Expense 0.0064 77.14
Parlour Expense 0.0028 34.43
0.2915 3511.94
COST OF SALES ( TOTAL SALES ) 57.5897 693668.145
PROFIT ( BALANCING FIGURE ) 0.2462 2965.575
SALES 57.8359 696633.72

Milk Collection (Daily Average) – 3.3 Million Liters

Average Annual Collection – 1204500000

Data Analysis

 With the help of factory overheads, administrative overhead and selling and distribution overheads
we can characterize the cost sheet and the total sales of Amul milk is 693668.145.
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 COST ANALYSIS OF AMUL

 The company is producing 100000 units of milk at Rs.0.2951 for which total cost is Rs.3, 511.94 and
total sales is 696633.72 which implies that profit being made is Rs.2965.575.

 We can see the Works Cost is Rs 6, 46,589, office cost is Rs.6, 91,892, Cost of Production is Rs.6,
90,156 and the Cost of Sales is Rs.693668.145 thus the lowest expense of Amul Milk is for the raw
materials and highest cost is the Cost of Sales which includes transportation, crate expense,
advertisement, sales and promotion, whereas Office Cost and Cost of Production are normal.

 Overall as the company is earning some percentage of profit above the cost it means a slight increase
in cost will not have too much of an effect on profit.

 Since the company is earning some amount of profit the business will be able to expand and diversify
over a period of time.

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