Amul Cost Analysis Amul is a brand dealing with dairy products under the Gujrat Cooperative Milk Marketing

Federation, which is Indias largest food products marketing organization. It is a state level apex body of milk cooperatives in Gujrat which aims at providing remunerative returns to the farmers and also serve the interest of consumers by providing products which are good value for money. Amul the age old brand belongs to (GCMMF), Amul means Priceless in sanskrit. Amul is a symbol of providing quality products at reasonable cost, of the genesis of a vast co=operative network, of the triumph of indegenois technology, of the marketing savvy of farmers organization, And of a proven model for dairy development.

Looking athe ice cream section of Amul we have anaylsed and observed the different types of cost incurred by Amul which are as follows Direct Cost

Variable Cost The cost incurred in the ice cream manufacturing plant of Amul that vary with production are costs of glucose, flavouring substances, freight, storage, labour because they vary with the quantity of ice cream produced. Fixed Cost The Fixed cost that does not tend to vary with activities include costs of machinery and factory premises, wages and salaries, electricity, utilities, rent, insurance, equipment depreciation, advertisement etc. Product Cost Amul purchases sugar, machines, essences, dry fruits, labour and manufacturing overhead and packaging materials,etc. Period Cost Costs that can be mapped to specific periods such as rent, salaries, taxes, electricity costs are called Period Costs. Opportunity Cost The potential benefits that Amul has given up when it produces ice cream are utilizing its resources to other products such as flavoured milk, ghee, cheese, butter and other milk products.

Sunk Cost Sunk Costs of Amul are Machinery Cost, Plant Cost, Equipment Cost, Building Cost. Controllable Cost Amuls managers have full control over allocation of budget on some expenditures like promotion, distribution, social costs, etc. Uncontrollable Cost There are some costs on which Amul have no direct control are raw material prices, electricity charges, tax rates, i.e. Amul cannot control the tax rates fixed by Govt. Out of Pocket Cost Costs such as scheduled maintenance expenses, operating costs of boilers and freezers. This is because Amul does not have a choice to incur these expenses. Differential Cost Since its inception, Amul has increased its production tremendously. Hence, the cost of selling the additional units also increased. The difference between the initial cost of sales and the current cost of sales can be taken as one of the differential cost. Marginal Cost Cost of producing one additional unit of ice cream is called Marginal Cost. Average Cost The total cost of all jobs involved in the production of ice cream divided by the total units of ice cream produced is called the Average Cost.