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 stops that are generally adopted by a researcher in studying
his research problem along with the behind them. The basic steps in research are
also following.

Steps in planning a research study:

 Formulating a research problem.,

 Concept utilizing a research design
 Constructing an instrument for data collection
 Selecting a design

Steps in conducting a study

 Collecting the data

 Processing data
 Writing research project
 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 is several way of collecting the appropriate data which differ considerably in
context of money costs, time and other recourses at the disposal of the research.

There are two types of data:

1. Primary Data :

Primary data is important for as 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 conform the basis of objective conclusions. Primary data
is the specific information collected by the person who is doing the research.

2. Secondary Data:
Secondary data is data collected by someone the than user. Common sources
of secondary data for social science include censuses, surveys. Secondary
data analysis saves time that would otherwise be spent collecting the 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
 COST SHEET OF THE BEST INDIA COMPANY

PROFORMA OF COST SHEET

Cost sheet of every 1 Lac Units Produced and
sold
Cost Per Unit
Quantity Manufactured 1 1,00,000
Quantity Sold 1 1,00,000

CPU (Rs)
Direct Cost
Raw Material consumed
Opening stock of raw materials 0
Purchases of raw materials 6,805
(-) Closing stock of raw materials 0
Materials consumed 6,805
Direct Labor Charge / Wages 0.125
Direct Cost / Expenses 0.2416
PRIME COST 7.1705

INDIRECT COST
Factory / Works Overheads
Indirect Labor 0.122
Depreciation on Machinery 0.775
Works Overheads 0.05304
Cost of Maintenance 0.0589
Other Factory Expenses 0.0282
Supervisors Salary 0.384
Power & Fuel 0.5678
Total Overheads 1,98,894
FACTORY COST 9,15,944
Office & Administrative Overheads
Depreciation on office furniture@7% 0.0281
Office Rent 0.0585
Salary of Staff 0.090
Office & General Expenses 0.0258
Telephone Expenses 0.0219
Electricity & Lighting 0.03223
Printing & Stationery 0.00294

Total Office & Administrative Overheads

Cost of Goods sold 7,97,032

Selling & Administrative Overheads

Sales Commission 0.705
Salary of Salesman 0.1
Carriage Outward 0.12798
Sales Expenses 0.057
Total Selling & Admin Overhead 0.98998

COST OF SALES 8.96029

PROFITS 1.03971
SALES 10

Raw material cost

Indian Yellow Maize 3.756

Corn Suzi 4.892
Broken Maize 5.6789
Maize Flakes 3.4781

Raw material per unit 11.805

 COST SHEET ANALYSIS
Direct Cost:

Direct Materials
To manufacture one unit of MAKA following RAW MATERIALS are
requested.

Indian Yellow Maize

Corn Suji
Broken Maize
Maize Flakes

 Direct Labor / Wages :

Direct Labor / Wages amounts to Rs. 0.125 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 company which is carriage inward. It also includes the amount paid
loading unloading charges and other petty expenses.

 INDIRECT COST :
Factory Overheads:
The factory overheads includes the indirect labor, depreciation on
machinery, works overhead, cost of maintenance, other factory expenses,
supervisor’s salary and power & fuel.
 Indirect Labour :
The amount of indirect labour 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 WDU calculated @ 10%
p.a. this value amount to around 43.8% of the Factory overheads the
percentage high because of the level automation & technology used for
production.

 Power :
Per unit power & fuel consumption is Rs.0.5678.

 Other factory expenses :

Other factory expenses include maintenance of factory and other
miscellaneous expenses.

 Office and Administration expenses :

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. 0.090 per unit cost.
  Office and general expenses :
This comprises of refreshments, postage and telegrams and other petty
expenses.

 Printing and Stationery :

This consists of photocopy charges, printouts and other stationery
items.

 Telephone Expenses :
Calls made by the staff members.

 Electricity and Lightings :

It consists of office lightings and air conditioning expenses.

Sales and distribution overheads :

Selling and distribution cost includes sales, commissions, discount

salesman, 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 5% on the selling price.

 Salary Of Salesman: The overage 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 wholesalers, the
transportations charge per unit / product is set as Rs. 0.12798.

 Sales Expenses : This includes expenses incurred on advertisement and

promotional expenses such as newspaper advertisement, hordings, TV
commercials etc.

 Profit : The profit arise out of selling per unit of the product is 11.603% of the
total per unit cost price.
 CONCLUSION

1. The best India is undoubtedly the number one retailer in India. It has built a
very emotional and cordial relationship with its customers which are 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 the Best India
Company as they will be held accountable for the quality of their work.

3. The company is reaching out to all the sections of the society. Even after
having many competitions around, the company has managed to capture a
large market share not just in the urban but has also managed to penetrate
the rural markets.
 FINDINGS & SUGGESSIONS
 Finding :

i) Direct labour / wages amounts to Rs. 0.125 per unit which is

approximately 2.009% of the Prime cost.

ii) Direct cost includes costs incurred in bringing the raw materials into the
company which is carriage inward.

iii) The amount of indirect labour is Rs.0.122 per unit. This value includes
sweeper charges support staff etc.

iv) The depreciation is calculated on the basis of WDU calculated @ 10%

p.a this value amount to around 43.7% of the Factory Overheads.

v) As a part of encouragement for sales people they are given commission

of 5% of the total sales done by them.

vi) The average salary paid to the sales people is around Rs. 0.1 of the total
per unit cost of the product.
 Suggestions :

I. The amount of the 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.
II. 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.
III. 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.
 OBJECTIVES

1. This project was undertaken to have an insight into the cost structure of the
Best India Company.

2. The objective of cost sheet analysis is to determine the cost and with this
cost we can find profit margin for The Best India Company.

3. To study how cost sheet analysis is helping the The Best India Company in
controlling the cost.

4. To study how The Best India Company determine the cost of its product
through cost sheet analysis.

LIMITATIONS

1. The study based on primary & secondary data.

2. Time & Cost play major role in the development of a project.

3. One of the factors of the study was lack of availability of ample information
most of the information has been kept confident and as such as not assed as
art of the policy of company.