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COST SHEET ANALYSIS:

DABUR INDIA LIMITED.

Submitted by:

Elizabath

Eappen( F11076)

Neethu Thresa

Jacob(F11096)



Acknowledgement

We are thankful to Prof. Victor Louis Anthuvan for giving us an opportunity to prepare a cost sheet and

analyze it. This has been very helpful for us in understanding concepts like break even analysis, marginal

costing and its practical implications in business. This project would not have been successful without his

continuous guidance and theoretical inputs.

Elizabath Eappen(F11076)

Neethu Thresa Jacob(F11096)

Swarupa Rani Sahu(F11116)



Objective of the Report

The objective of the report is to study the balance sheet of a manufacturing company and carry out the

following:

• Prepare Cost Sheet

• Analyze the cost sheet

• Apply the concepts of marginal costing and CVP analysis

To achieve this purpose we have chosen Dabur India Ltd. and studied its annual report 2010-11.

Dabur At-a-Glance

Dabur India Limited has marked its presence with significant achievements and today commands

a market leadership status. The story of success is based on dedication to nature, corporate and process

hygiene, dynamic leadership and commitment to the partners and stakeholders. Dabur India Ltd is

considered as the leading consumer goods company in India with a turnover of Rs. 2834.11 Crore

(FY09). The three major strategic business units (SBU) - Consumer Care Division (CCD), Consumer

Health Division (CHD) and International Business Division (IBD). It has 17 ultra-modern manufacturing

units spread around the globe. Products marketed in over 60 countries. Wide and deep market penetration

with 50 C&F agents, more than 5000 distributors and over 2.8 million retail outlets all over India. The

master brands are : Dabur-Ayurvedic healthcare products),Vatika - Premium hair care, Hajmola - Tasty

digestives, Réal - Fruit juices & beverages, Fem - Fairness bleaches & skin care products.



COSTING

Costing is the technique of ascertaining cost.

A cost sheet is a statement of cost prepared at given interval of time showing various elements of cost of

a product produced, or service rendered during a particular period. This statement gives details about

total cost and cost per unit at different stages of production.

Important components of cost are:

a) Prime Cost = Direct material cost + Direct labour cost

b) Works Cost = Prime cost + Factory overheads.

c) Cost of production = Works cost + Office & Administrative overheads.

d) Total Cost (Cost of sales) = Cost of production + Selling & Distribution overheads.

From the balance sheet of Dabur India Ltd. as on 2011 and with the help of schedules to accounts and

notes to schedules we have prepared the cost sheet.

We have assumed the following for the preparation of cost sheet

• Rent has been assumed to be factory rent



• Insurance has been taken on building

• We assume that the land is used only for factory purpose.

• As the company has variant products, the selling price per unit cannot be estimated.So all the

calculation of sales has been limites to sales in rupees.

ANALYSIS OF COST SHEET

• Freight and forwarding charges form about 12.018% of selling and distribution overhead.

• Advertisement expense constitutes about 74.589% i.e the company focuses more on

advertisements.

• General expenses account to major portion of Administrative overhead which is 52.1%.

• Direct material constitutes 5.91% of the prime cost while Direct labour constitutes only

12.12 %

• The factory overhead consists mainly of power and fuel which is 36.08%. and followed by

processing charges which is 17.86% . Depreciation forms the major part of the factory overhead

which is 24.87%

• Rent paid for the building constitutes 12.07%.

• Profit margin is 32.049 % of net sales.

Factory OH as a % of Direct labour 65.25



• P/V Ratio

• Break even point

• Margin of safety

FIXED COSTS Rs.in crore

Depreciation on Building 727

Depreciation Plant & Machinery 2118

Depreciation lease on land 10

Rates And Taxes 348

Depreciation Vehicle 196

Depreciation furniture & fixtures 170

Depreciation computer 275

R&D 368

Auditor's Remuneration 76

General Expenses 9201

Security 446

Insurance 286

Director's Fee 2192

Telephone and Fax 355

Legal and Professional 2159Repair and Maintenance Building 281

Processing charges 2098

Other Repairs 678



• Margin of safety is an advantage to the company. It indicted the extra profit the company earns

over the breakeven point.Dabur’s MOS is 60.38% which is high. This means that the firm will earn

profits even if there is a slight fall in production or sales.This also contributes to a high angle of

incidence

• BEP sales is Rs. 129336.24 crores which is extremely low in comparison to current sales

(Rs.326437 crores).

• BEP analysis will help the banker in appraisal of actual/projected performance of the borrower.It

also acts a sensitivity analysis tool to judge the projected performance.

• For the company to reach a profit value of Rs.150000 it has to impove its sales by Rs.110184

crores.

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