Shalini Project Marginal Costing

THE STUDY ON MARGINAL COSTING
1.1 INTRODUCTION ABOUT THE INTERSHIP

The project mainly focused on capital structure analysis at Nandini Hi-tech product Plant the
term marginal costing analysis refers to the relationship between total costs Such as fixed
cost, variable cost, sales, marginal costing refers to the ascertainment of Marginal cost and
other effect on profit of changes in type of output by differentiating Between fixed and
variable cost. Marginal costing is not a separate costing it is only
Technique used by accountant to aid management decision. It is also called as direct
BGS INSTITUTE OF TECHNOLOGY
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costing in USA, this technique of costing is also known as
variable costing,
Differential costing or out-of-costing.
Since the revenue is equal to total cost, the business entity earns no profit nor does it incur
loss. If the sales volume exceeds the break even volume even by one unit, the company earns
profit. The amount of profit is equal to the product of excess units sold (cover and above
break- even volume) and unit contribution. In the same way, is the sales volume falls below
the break-even analysis does not aim only at finding out the Break-even point. Rather, it aims
at analyzing a number of other things (besides the computation of break-even point) such as
P/V ratio, Angle of incidence, Margin of safety, profit or Loss, Absorbed and Unabsorbed
fixed costs, ect. Therefore, Break-even analysis, in its broader sense, refers to the analysis of
impact of costs, price and volume and profit. In other words, it establishes the relationship
between cost, price, volume and profit.
This project reports contains five chapters, which begins with need for study, Objectives and
scope of the study, research methodology used e
The second chapter it covers industry profile and company profile which includes promoters
information, vision, mission and quality of the product , competitors information, SWOT
analysis financial statement ect.
The third chapter theoretical background of the study it includes elaborative

Information on the subject chosen for better understanding and usage in the analysis.
The fourth chapter comprehensive coverage of analysis and interpretation of the data
collected with relevant tablets and graphs. Results obtained by using statistical tools must be
included.
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The fifth chapter deals with the summary of findings, conclusion and suggestion
recommendations.
Nandini hi-tech product plant the milk procurement by the co-operatives in Karnataka has
steadily over the years due to the efforts and policies favouring milk production. Existing
infrastructure of the milk co-operative in the state was found to be insufficient for handling
the excess milk in order to meet the increased processing requirement, Karnataka milk
production (KMF).in consultation with national dairy development board(NDBB),conceived
to setup a product dairy of 400TLPD with 30MTPD power plant in the years 2005. It was
decide to the surplus milk of all 13 milk unions in Karnataka. The project was entrusted to
NDDB on turnkey exaction basis.
I am doing project in manufacturing sector with respect to Nandini hi-tech product plant
CHANNARAYAPATANA I hope this report will be extremely useful for those it is mean.
Constructive and healthy suggestions for improvement of the report will be great fully
appreciate.
1.2 TOPIC CHOSEN FOR THE STUDY
The topic selected for analysis of marginal costing or cost volume and profit analysis at
Nandini hi-tech production plant. The variation of cost is also analyzed with their effects on
the overall working or unit in the present scenario Nandini hi-tech product plant one of the
leading producers of milk product and facing the problem of huge cost of production. The
companies is incurred more capital expenses and insufficiently of the raw material. To
increase profit the company has to increase the sales. It should note BEP under various
situation of changing sales mix, price and cost if has to study what are the most and least
profitable product and it to forecast the impact on profit when sales mix is charged.
1.3 NEED FOR THE STUDY
The need of the study helps the company it identity their position by which the company can
increase or decrease the total cost of production. It also helps the company to identify and
offer a minimum rate of product price according to the expectations of the customer so that
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the companys sales level will get increased. Hence, it is prepared to understand the study on
marginal.
1.4 OBJECTIVES OF THE STUDY
To understand the financial position of the company
To determine the selling price which will give the desired profit?
To determine the sales volume to earn a desired profit or return on capital employed.
To identity the break even sales, contribution margin ratio, margin of safety with
respect to Nandini hi-tech plant
To measures the degree of leverages with respect to Nandini hi-tech.
To analyze the trend of margin costing with respect to Nandini hi-tech plant
1.5
SCOPE OF THE STUDY

The study is mainly concentrated on cost volume and profit
analysis
of
the
company the company cost control will influence more on the level of cost management of
the company.
The study is on the three years sales of the company which will give a clear picture
about the minimum sales require to achieve breakeven. The study is on variable cost,
contribution, fixed cost, P V ratio, breakeven sales, margin of safety, prating leverage is 3
years.
This study is limited only to Nandini hi-tech product plant and analysis of marginal
costing is only for 4years that is from 01/4/2011 to 31/3/2014.
To understand the importance of the determination of break-even-point with respect to
changes in sales and revenue.

1.6 METHODOLOGY
Research methodology describes the various steps that are generally adopted by a
researcher in studying the research problem along with the logic behind them. Data is
important for any study has been obtained from the secondary data. The secondary data can
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be collected from the financial statement like, final account annual report NANDINI HITECH PRODUCT PLANT.
1.7 LITERATURE REVIEW

Literature review is most important to identify the problem of the study, which can be solved
by collection of data. It is very important to know that the work is doing by researcher in a
research should not be repeated again. Literature review observed about the work that it is
doing, is repeating unintentionally. It also helps to avoid the mistakes, which already done by
another one. So researcher can improve the research is depends on the past knowledge, and
not includes a part of knowledge. A well created review establishes creditability of the
researcher of the study, so he can get the entire benefits of his work.
This research study was conducted by M SHIVA KUMAR during the year 2010-11
titled A PROJECT REPORT ON MARGINAL COSTING at BEVCON WAYORS.pvt.ltd

during the research he found the Aberdeens Spend Analysis Benchmarking Study 2007
while enterprises are clearly able to recognize and communicate the benefits of utilizing
spend analysis technology, they have yet bridged the gap to action. Sixty percent of
organizations currently rely on manual tools to collect and analyze spend data, resulting in
limited spend visibility and the inability to improve cost saving.
Findings
Aberdeen evaluated over 700 enterprises in July and August of 2007 and distinguished Bestin-Class enterprises by the percentage of enterprises spend under management. Best in Class
enterprises in this study are notable for their superior performance and credit spends analysis
solution for delivering the following benefits.
1.
12.7% savings due to sourcing efforts based on spend analysis data
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2.
9.1% reduction in manual correction of spend cleansed and classified
3.
73% rate compliance to contractual agreement.
The goal of this primer has been to describe the major principles, concepts and methods for
doing economic analysis of highway projects. The coverage of these subjects has been
necessary brief. For the interested reader, a wealth of additional information from publicly
accessible sources.
Benefit BEP analysis is the most comprehensive method to evaluate the reasonableness of
highway projects in economic terms. In some cases, when it is clear that a project must be
undertaken regardless of its cost. (e.g., a critical bridge on a interstate highway must be
repaired or replaced in kind).
This research study was conducted by Balachandru Dhananjaya during the year 2008-
09 titled A PROJECT REPORT ON MARGINAL COSTING at Niranjan sugars.pvt.ltd

during the research be found The Aberdeens Spend Analysis Benchmarking Study 2005
while enterprises are clearly able to recognize and communication the benefits of utilizing
spend analysis technology.
Findings
1.
Raw material consumption is increasing. The increasing in sugar cane consumption
from the year 2003-03 or 2004-05 and from the year 2004-05 was 80.22%
Suggestions
1.
As prime cost of production are increasing in the firm exercise cost
reduction and
cost control techniques like material, labour control, overhead control, capital expenditure
control.
2.
As the raw material cost is increasing in the firm should using new technique to
reduce it.
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3.
Reducing raw material usage in production down time.
CONCLUSION
In this study is attempted to made analyze the BEP analysis of the simple unit. Since the
Nirani Sugar. Pvt.ltd is facing heavy competition in an around area of the region. It is
essential to focus on the aspect of the marginal costing.
BY RUSS HEADLEY
This article focuses on cost; costs are the monetary values of the resources, which have to be
used for the production. Cost control can defined as getting the best results with the lowest
offering of resources. The management instrument that can be used to control the costs of a
company are. Budgeting, Balanced Scorecard, Benchmarking, Activity-Based Management.
These instruments can be used in combination with each other because they can support the
decisions made by management.
BY SORIN BRICIUI, SORINEL CAPUSNEANU2

This article suggests that, ABC based costing the three instrument have examined, present
number of advantage which it recommends as one of the most effective tools for monitoring
and measuring performance of the Activity-based costing method (ABC)
And beyond, they are the real foundation on which decision are taken by the management of
the enterprise.
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PATRICK MCCARTHY
School of Economics and Centre for paper business and Industry studies Georgia institute of
technology and Aselia Urmanbetove school of public policy Georgia institute of technology.
This paper focus on production and cost, production and cost characteristics and a naturals
extension would explore long run production and cost to determine where on the long run
average cost curve a representative firm in the industry operates globalization it affect on
industry
cost structure. Although interpreted as technological progress, the time variable
also reflects other significant developments that have occurred over time including
globalization and increasing competition from abroad.
BY AMRTHYA SEN
This article focus on cost benefits, cost benefits analysis is a very general discipline, with
some basis demands-expressed here in the form of foundation principles-that establish an
approach but not a specific method. Even these elementary demands would be resisted by
those who would like a different general approach, involving, say, implicit valuation (rather
than explicit articulation) or the use of pure deontological principles (rather than broadly
consequences.
BY RODALE R GEIGER
This paper focus on the objectives of managerial cost systems is learn something about
resources consumption and motivate more efficient consumption and eliminate free goods,
create cost awareness and give managers the information they need to make wise choices in
managing constrained resources. This purpose is best served through relevant cost
measurement customized to meet management need.
1.8 LIMITATION OF THE STUDY
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The study is based on secondary data and the data available from the annual reports of
the company.
As data was confined to project did not allow for the in depth study regarding the
performance of the company.
As it is an external study conclusion and suggestions are not ultimate and are base on
personal judgement and the ability of the researcher to understand the concept.
The study is conducted only on determination of marginal costing
It assumes that the fixed costs are constant
It multi-product companies, it assumes that the relative portions of each product sold
and produced are constant.
It assume that the quantity of goods produced is equal to the quantity of goods sold
It assumes average variable costs are constant per unit of output.
Marginal costing is only a supply side analysis, as it tells you nothing about what
sales are actually likely to be for the product at these various prices.
2.1 INDUSTRY PROFILE

History of Milk Industry:
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Around 60-70 years back, at the time of British rule, the farmers of Gujarat were one
of the best milk producing state in India. There was a British agent named Polson who was
deciding the price of the milk. The farmers were not getting right price of their production.
This harassment continued for years. Later the farmers organized themselves to avoid this
harassment. The farmers complained to Sardar Vallabhai Patel about this and decided not to
sell milk to the British military people. This is how the concept of union came into picture.
From 1947-48, Gujarat started selling milk directly to the consumer not giving milk to
British people, our late Prime Minister Lalbahaddurshastry thought to from same type of
unions throughout India. Since then operation flood came into existence. In 1975, Karnataka
also implemented the village co-operative societies.
Operation Flood:
National Dairy Development Board (NDDB) was found in 1965. Dr Varghese
Kurian the founder chairman of NDDB after which dairy development became a regular
organization and the operation flood program was conceived by the NDDB.
Operation Flood Phase 1:

It was launched in 1970 following in an agreement with world food program. The first
phase of operation flood laid the foundation for Indias modern dairy industry that ultimately
met the countrys need for milk and milk products.

It was implemented between 1981 and 1985. It integrated the dairy development
projects being implemented with the aid of World Bank.
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It aimed at ensuring that the co-operative organizations become self-sustaining. This

program aimed at substantial expansion of the dairy processing and marketing facilities with
extended milk procurement infrastructure and professionalization of dairy development.
Dairy farmers are highly dependent upon having a local processing facility to buy
their product because milk rapidly deteriorates prior to processing dairy farmers are highly
dependent upon having a local processing facility to buy their product because milk rapidly
deteriorates prior to processing. This has encouraged the development of co-operative in
dairy sector. Co-operative rules usually require the compulsory purchase of all member
products; hence, by becoming members of a local co-operative, dairy farmers have been able
to ensure an outlet for their highly perishable product.
National Dairy Development Board
Introduction:
The government of India constituted the National Dairy Development Board in the year
1965 Shri. LalbahadurShastry initiated the setting up of NDDB. The board is registered
under the societys registration act and public trust at the head office is at Anand and is
organization in to 9 functional divisions.
Objectives of National Dairy Development Board
To sponsor, promote, manage, acquire, construct control any plant or work which promotes
or advances the projects of general public utility reactions to dairying.
1.
To make available on request, information services to increase production

development to release to production and marketing of agricultural and food products.
2.
To provide international liaison with other national dairy boards and international
agencies in order to facilitate exchange of information and personnel as well as to assist in
development of dairying in other countries.
Industry Growth:
The estimated production capacity in India is 60 million tones 1992-93 the value of
the annual output of dairy is Rs.3,00,000 million to consolidate the gains of state of
Karnataka and with a view to efficiency chill process and market ever developing and
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increasing milk dairying achieved in the procurement with an almost emphasis on the quality
and in the process conserve the socio economic interest of rural milk producers, the
government of Karnataka through KMF has proposed.
Operation flood came to third phase (1986-94) after successfully completing first
phase (1981-85) the product operation flood laid stress on setting up rural milk producers cooperative organization to produce and market the milk on one than market technical input for
milk production the other hand.
World top 9 milk producing countries:

COUNTRYS
2011 (1000MT)
INDIA
121,500,00
UNITED STATES
88,768,00
CHINA
31,780,00
RUSSIA
31,200,00
BRAZIL
30,846,00
NEW ZEALAND
18,049,00
MEXICO
11,228,00
ARGENTINA
11,070,00
UKAINE
10,812,00
MILK PRODUCTION IN INDIA

The bulk of the milk supply of the country is produced in rural areas. It has been estimated
that only 4 per cent of milk cows and less than 61per cent of milk buffaloes are kept in towns
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and cities. U.P. is the largest producer of milk followed by Punjab, Bihar, Andhra Pradesh and
Rajasthan. M.P. and Orissa, account for low production.
Table 3.2: Production of Milk in India (1000 Tones)
Year
Cow milk
Buffalo milk
Goat milk
2004-05
Total
14,895
22,325
1,488
51,408
2005-06
22,240
28,675
2,381
53,938
2006-07
27,679
34,903
2,707
65,289
2007-08
27,832
35,692
2,973
66,497
2008-09
31,546
40,122
3,032
74,700
2009-10
33,046
41,622
3,432
78,100
2010-11
34,920
44,051
4,365
83,336
2011-12
35,600
46,254
4,658
86,512
2012-13
38,520
47,120
4,942
90,582
2.2 Company Profile:
Nandini Hi-Tech Product Plant

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Shettihally, C.R.Patna.
COMPANY PROFILE
COMOANY NAME:
KMF Nandini Hi-Tech Product Plant,

Page 14
Shettihally,
B.M.Road,
Channarayapatna,
Hassan (Dist.)
-573116
DIRECTOR:
Govindegowda
NATURE OF BUSINESS:
Milk based powder & UHT Milk

Co-operative unit.
TYPE OF BUSINESS:
Co-operative units include Private Agencies.
TEL-NO:
08172-254254
RAW MATERIAL:
Milk, 3 lakh liters/day.
STORAGE FACILITY:
Milk storage facility 600-KL

Cream storage facility 60-KL
Butter storage facility 550-KL
Ghee storage facility 10-KL
Skimmed milk powder 10-KL
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Whole milk powder(WMP)
CAPACITY OF PLANT:
Milk processing-400 TLPD

Milk powder production-30MTPD
Butter production-15MTPD
Ghee production-2MTPD
Ultra Heat Treated(UHT) Good Life-10KL
FINISHED PRODUCTS:
Butter, Ghee, Milk powder, UHT Good life.
TOTAL INVESTMENT:
Estimated project of Rs.100 Crore.
LAYOUT:
22 acres of the land beside National Highway

NH-48,
Banglore-Manglore Road,
Shettihalli.
BACKROUND AND INCEPTION OF THE COMPANY

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BACKGROUND:
The milk procurement by the co-operatives in Karnataka has steadily increased over the years
due to the efforts and policies favouring milk production. Existing infrastructure of the milk
co-operatives in the state was found to be insufficient for handling the excess milk. In order
to meet the increased processing requirement, Karnataka Milk Federation (KMF), in
consultation with National Dairy Development Board (NDDB), conceived to setup a product
dairy of 400 TLPD with 30 MTPD powder plant in the year 2005. It was decided to the
surplus milk of all 13 milk unions in Karnataka. The project was entrusted to NDDB on
turnkey execution basis.
SAILENT FEATURES OF THE MILK PRODUCTS:
Effluent treatment plant using environment friendly anaerobic technology.

States of art automation (DCS/SCADA) for milk processing and powder
manufacturing and energy efficient equipment and machineries adhering to HACCP
standards along with advanced dairy transaction processing system (ERP).

Fully automated refrigeration plant using environment friendly ammonia liquid over
feed system with ICE silo.

The project has been setup in a 22 Acres of land, beside national high way NH-48
(Bangalore-Mangalore)
Estimated cost of the project is Rs.100Crores. out of which 20% borne by KMF and
remaining is loan from NDDB.
Processing capacity:
Milk processing:400TLPD (1000 liters/day)

Milk powder production: 30MTPD (Metric tons/day)
Butter production: 21MTPD
Ghee production: 5MTPD
UHT milk processing & packing: 1LLPD (Lakh liter/day)
2.3 Promoters:
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Government of Karnataka.
Director of NHPP Honnayya Shetty and co-directors.
Employees of the organization.
Formers.
2.4 VISION:
To be the leading producer of milk products by introducing advanced quality enhancement
techniques. To provide fresh quality products & competitive prices & there by uplifting the
financial position of the rural milk producers.
To ensure prosperity of the rural Milk producers who are ultimate owners of the
Federation.
To promote producers oriented viable co-operative society to impart an impetus to the
rural income, dairy productivity and rural employment.

To bridge a gap between price of milk procurement and sale price.
To develop business acumen in marketing and trading disciplines so as to serve
consumers with quality milk, give a fillip to the income of milk producers.
To complete with MNCs and private Dairies with better quality of milk and milk
products & in the process sustain invincibility of co-operatives.
MISSION:
The mission is to become a leading concern in the milk products manufacturing, by
implementing modern machinery & equipments & to provide quality milk products to the
customers.
Procuring the raw milk from the local farmers at a fair price.
Pasteurization and homogenizing of the procured raw milk.
Heralding economic, social and cultural prosperity in the lives of our milk producer
members by promoting vibrant, self-sustaining and holistic co-operative dairy
development in Karnataka state.

Producing the other milk products.
Transporting the pasteurized milk in various quantities from processing plant to the
urban areas.
Supply milk to the consumer at a reasonable rate.
Developing good infrastructure facilities.
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QUALITY POLICY:
To encourage rural farmers to engage in dairy forming and producing more milk and
quality at least cost.

Deliver products & service and meeting customer requirements.
To provide assured and remunerative market for the milk producers by the farmers.
Develop environmentally sound products, process & health conserve resources.
Company with statutory & regulatory requirements relevant to the product service
environment health & safety.

To provide good quality of milk and milk products to the people of urban area by
scientifically processing the milk obtained from rural area.

Meet the requirements of our valued customers through manufacture & supply of milk
products.
To create harmonious environment for the union can perform at its best, being a
communication bridge between producers and consumers.

Milk & milk products adopting scientific methods & linear programmed formulations.
Improve our performance thereby enhancing satisfactions of our customers.
2.5 PRODUCT PROFILE

There are four types of products produced by NHPP:
1.
2.
3.
4.
Tetra Pack.
Butter
Ghee
Skim milk powder.
1. Tetra pack(good life):
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Cows pure milk, UHT processed, bacteria free in a tamper- proof tetra pack which keeps this
milk fresh for 90 days without refrigeration until opened. It is available in 500ml 200ml and
100mlat premium store across the country. On April 03, 2014 - GOODLIFE SALES TOUCHED
5.3LLpd, all time high.
2. Butter:
Butter serves as the balance wheel of the dairy industry; surplus milk is
converted into butter, while during times of scarcity the milk intended for
butter making is used for more essential products. It is obtained by
churning cream, gathering the fat into a compact mass and then working
it. It is available in 25kg paper board and stored at -20c for 12 months
from the date of manufacturing.
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3. Ghee:
It is the product obtained from surplus fat, prepared from butter .It is
Packed in 15kg tin packs respectively. And in tanker it will be sent for
Thirumala. Firstly license is obtained after which special grading is given
then it is packed.
Ghee packet
4. Skim milk powder:

Milk powder is made from pure milk; processed and packed
hygienically .It is available in 25kg craft paper bags and can be stored at
room temperature for 1 year.
Milk powder packet:
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Price table:
PRODUCTS
QUANTITY
PRICE(in Rs)
GOOD LIFE MILK
100 ml
200ml
Page 22
500ml
20
BUTTER
25 kg (bulk)
4845
GHEE
25 kg (bulk)
6075
SKIMMED MILK
25 kg (bulk)
4523.50
1 kg (KSHIRA BAGYA
As per Govt standard
POWDER
WHOLE MILK POWDER
SCHEME FROM GOVT)
2.6 Areas of operation:

Nandini Hi-Tech Product Plant is set up in a 22 Acres of land, beside National Highway NH48 (Banglore-Manglore) at Shettyhalli, C.R.P, Hassan-District, and Karnataka-573 116.
Suppliers of the raw milk:
o
o
o
o
HAMUL
MYMUL
TUMUL
MANMUL
Consumers of NHPP:
The products of NHPP are distributed in out of states like, Andhra Pradesh,
Tamilnadu& also supplied to Hubli& Mangalore.
2.7 Infrastructural facilities:
Infrastructural facilities of Nandini hi-tech plant in Shettihally, Channarayapatna are as
follows
1.
2.
MILK PROCUREMENT
Milk collection fanners
Dairy co-operative society
TRANSPORTATION
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They have procurement group contract vehicles.

Eg: milk tankers,
3. MILK PROCESSING
Raw milk reception dock
Cream separators
Milk pastures
Stored tanks
Electronic milk tester and milk scan
4.
5.
6.
7.
8.
PACKAGING
GOOD LIFE Milk packaging machine
Flavoured milk packaging machine
Ghee packaging machine
Nandini Milk powder
Nandini Butter
ENGINEERING
Reformation equipments
Boiler equipments
Effluent treatment plants
Electronic generation
MARKETING
Distribution network
Agents
Parlours
TCD
WSD
DISTRIBUTION AND TRANSPORTATION
Trucks
Auto
Mobile van
OTHER FACILITIES
Security canteen facilities
Shift facilities- 3 shift per day
Heat allowance
Cold allowance
Production block
Administration block
Fuelling point
Garage block
Functions of the production department:

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Collection of raw milk from different sources

Testing the received milk for quality
Weighing
Processing
Pasteurization
Storing milk and
Packing milk packing
MILK RECEPTION AND STORAGE:
Two tanker reception bays with a maximum capacity of 30,000ltr per hour are
provided. It will be weighed and laboratory tested to check temperature, PH, %SNF,
%Fat and Acidity. Tanker will be weighed at electronic weigh bridge (40 tons).
Installed at the entrance gate. Recorded weighments are subsequently transmitted to
the central control room. After automatically agitating the milk for lab testing to
confirm to the requirements of temperature, fat%, SNF%, acidity, ph.

If the quality of the milk is found acceptable the tanker is taken for unloading. The lab
test reports are also transmitted to the central control room. Unloading of the tanker is
done by connecting the hose pipe to the tanker valve. Raw milk flows through the
stain less steel desecration vessel and inline disc type strainer and is pumped by a
sanitary centrifugal pump.

Two milk processing lines each of capacity of 20,000ltr per hour is provided. The raw
milk from RMS undergoes processes like pasteurization and cream separation in the
section.
The system is designed for a 93% thermal regeneration capacity of the pasteurizer.
And production of cream of 40% fat. The pasteurized skim milk can be stored in any
3 no. of pasteurized milk silos each of 1lakh capacity.
MILK RECEPTION IN TANKER:
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Milk storage:
ORGANISATION STRUCTURE
Director
General Manager
Page 26
Manager
Manager Manager
(Dairy)
(Engineering)
(Finance)
Deputy
Manager
Deputy
Manager
Engineerin
g
Assistant
Manager
Assistant
Engineering
Technical
Officers
Dairy
Supervisor
Technician
Technician
Accounts
Officer
Manager
Manager
Manager
Manager
(Marketing)
(System)
(Admin)
(Purchase)
Assistant
Manager
Account
Assistant
Assistant
Director
Managers
Officers
System
Operators
Administratio
n Officer
Assistant
Manager
Administration
Assistant
Admin
Assist/
Marketing/
Admin
Assist
WORK FLOW MODEL

Primary milk producer
Milking
Village dairy co-operative society
Chilling
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Transportation
Packing Section
Primary
Milk
Good
Production
Security
Quality
Chilling
Processing
Reception
milk
milkcheck
received
check
Section
milk
producer
dock
Quality check of information
Dispatch through transport vehicle

Security check, Agents and consumers
2.8 Competitors Information:

(a) For Good life milk:
Nestle a+ milk, AMUL TAAZA, Britannia, etc..
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(b) For Butter:

Nestle
(c) For Ghee:

NOVA pure Ghee, Nestle Every day, AMUL Pure Ghee, Cosmovedascocos Ghee (Bio),
etc..
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(d)For milk powder:

Nestle NIDO, Organic valley, Millac, Infant dry milk, etc.
Another competitors are Dodla milk & Arokya milk.

2.9 SWOT ANALYSIS
SWOT is an abbreviation of four terms that is Strength, Weakness, Opportunities,

and Threats. SWOT analysis is good for analyzingan company and also it is a tool
for auditing an company and its environment. This analysis will give a cross section
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of the company. It is the first stage of planning and helps marketers to focus on key
issues.
STRENGTH:
Nandini enjoys good brand image.
Nandini is a large procurement base.
K.M.F is the huge infrastructure for processing.
KMF has the Competitive prices.
Nandini Product dairies different range of product.
K.M.F has wide distribution network leads to regular and timely supply.
K.M.F enjoys highest market shares in the packed milk segment.
WEAKNESS:
Perishable commodity.
Lack of professional man power.
Bureaucratic method of functions.
Due to bad smell that persist causes low sales.
OPPORTUNITIES:
Huge market demand.
There is scope for developing in new area.
Availability of buffalo milk-Improves market milk quality.
Predominant of loose milk segment divide appropriate strategies.
THREATS:
Increase of competitors milk vendors, unorganised sector.
Flexibility in commission structure.
No entry barriers for private players.
Low level of consumer awareness.
Persuade benefits of competing brand.
2.10 Future growth & prospectus:
Ghee production & various quantities like 100, 200, 500, 1000 ML and 5 kg Tins.
Additional 30 MT (metric tone) production plant will be establish.

Discovering new marketing areas.
Export the product.
Introduce sterilizes flavour milk.
Dairy weightiness.
Page 31
Introduce value added product.
2.11 FINANCIAL STATEMENT:

BALANCE SHEET AS ON 31/3/2014
LIABILITIES
1/4/2013 to 1/4/2013 to
31/3/2014 31/3/2014
Capital a/c
Loans from TPLI
35,97,05,135 Capital work-inprogress
31,39,159
Fixed Asset-powder
plant
76,19,57,339
3,87,60,885
Fixed Assets-UHT
Plant
10,47,16,711
Tetra Pack-Plant &

Machinery
5,94,48,072
2,64,16,640
EMD & Secure

Deposit
9,30,657
Other Liability
3,132
Depreciation
Reserve
1/4/2013 to
31/3/2014
71,21,65,496
32,09,44,250
Current Liabilities
Sundry Creditors
1/4/2013 to
31/3/2014
Fixed Assets:
Loans (Liability)
Secured loans
ASSETS
-21,70,95,785
Current Assets:
10,68,10,947
Page 32
Outstanding
Liability
39,91,598
Salary Recoveries
3,03,429
Branch/ Divisions:
25,097
Gulbarga Sales
Depot.
KMF Central Office
Opening Balance
Bank a/cs
-3,69,087
34,87,22,926
Profit & Loss a/c:
8,75,89,486
30,39,220
-1,01,98,354
Cash-in-Hand
-76,888
Hubli Sales Depot.
(-) Tranferred
Deposits (Assets)
34,83,02,047 Sundry
Bellary Sales Depot.
Current
Closing Stock
46,116
2,02,65,781
Staff Advance
8,80,698
ADV to NDDB
51,88,000
7,93,23,803
-66,48,922
7,93,23,804
-66,48,922
TOTAL
81,89,76,442 TOTAL
81,89,76,442
BALANCE SHEET AS ON 31/03/2013

LIABILITIES
1/4/2012 to
31/3/2013
1/4/2012 to
31/3/2013
Capital account
1/4/2012 to
31/3/2013
Fixed assets
Loan (liability)
Prospect new 8%
ASSETS
43,12,83,189 Fixed assets

powder plant
3
8,54,49,500
Fixed assets UHT

plant
4,58,33,689
Tetra pack plant

and machinery
Loan from TPIL
1/4/2012 to
31/3/2013
74,80,72,518
76,11,05,236
10,34,25,493
5,94,48,072
Page 33
Current liabilities
Sundry creditors
2,56,68,665
1,58,99,650
EMD and security

deposits
9,11,057
Other liability
89,494
Depreciation
reserve
Current assets
Closing
Deposits (assets)
Outstanding
liabilities
85,46,541
Loans and advances

(assets)
Salary recoveries
2,21,922
Sundry debtors
Branch/ divisions
Bangalore sales
deposit
Bellary sales
deposit
Central training
institute
17,59,06,283
41,83,77,384
Cash in hand
12,06,07,797
9,83,19,326
26,84,340
2,508
84,04,694
10,079
1,511
Bank accounts
74,64,951
-26,91,688
Staff advances
3,19,900
ADV to NDDB
34,02,000
331
Gulbarga dairy
P &L A/C
66,48,922
70,936
Gulbarga sales
deposit
-3,69,912
KMF central office

a/c
4
2,14,24,141
Mysore sales
deposit
TOTAL
89,96,889
Current period
66,48,922
Less: Transfered
89,96,889
94,195
Hubli sales deposit
Mangalore sales
deposit
Opening stock
44,259
-8000
87,53,29,237
TOTAL
87,53,29,237
Page 34
THEORETICAL BACKGROUND OF THE STUDY

3.1 BACKGROUND OF THE STUDY
Marginal costing as one of the tools of management accounting helps management in making
certain decisions. It provides management with information regarding the behaviour of cost and be
incidence of such costs on the profitability of an undertaking, marginal costing is defined as the
ascertainment of marginal costs and of the effect on profit of changes in volume or type of output by
differentiating between fixed costs and variable costs. Marginal costing is not a separate costing it is
only technique used by accountants to aid management decision. It is also called as Direct costing
in USA, this technique of costing is also known as Variable costing, Differential costing or Out-ofcosting.
Page 35
According to CIMA terminology marginal costing is the ascertainment of marginal costs and
of the effect on profit of changes in volume or type of output by differentiating between fixed costs
and variable cost in this technique of coasting only variable costs are charged to operation, processes
or products leaving all indirect costs to be written off against profits in the period in which they arise.
Thus marginal costing is the accounting system in which variable costs is charged to cost
units and fixed costs of the period are written off in full against the aggregate contribution. It special
value is in decision making. It is a technique of applying the existing methods in a manner in order to
bring out the relationship between profit and volume of output.
Meaning of marginal cost

Marginal Cost: The term Marginal Cost refers to the amount at any given volume of output by which
the aggregate costs are charged if the volume of output is changed by one unit. Accordingly, it means
that the added or additional cost of an extra unit of output.
Marginal cost may also be defined as the "cost of producing one additional unit of product." Thus, the
concept marginal cost indicates wherever there is a change in the volume of output; certainly there
will be some change in the total cost. It is concerned with the changes in variable costs. Fixed cost is
treated as a period cost and is transferred to Profit and Loss Account.
Marginal Costing:
Marginal Costing may be defined as "the ascertainment by differentiating
Between fixed cost and variable cost, of marginal cost and of the effect on profit of changes in volume
or type of output." With marginal costing procedure costs are separated into fixed and variable cost.
According to J. Batty, Marginal costing is "a technique of cost accounting pays special attention to the
behaviour of costs with changes in the volume of output." This definition lays emphasis on the
ascertainment of marginal costs and also the effect of changes in volume or type of output on the
company's profit.
3.2 FEATURES OF MARGINAL COSTING
Costs are separated in to the fixed and variable elements and semi variable costs are
also differentiated likewise.
Only the variable costs are taken in to account for computing the value if stocks of
work in progress and finished products.
Fixed costs are charged off to revenue wholly during the period in which they are
incurred and are not taken in to account for valuing product cost/inventories.
Process may be based on marginal costs and contribution but in normal circumstances
prices would cover costs in total.
It combines the technique of cost recording and cost reporting.
Profitability of departments or products in determined in items of marginal
contribution.
The unit of a product means the average variable costs of manufacturing the product.
All elements of costs are classified into fixed and variable costs.
Marginal costing is a technique of cost control and decision making.
Page 36
Variable costs are charged as the cost of production.

Valuation of stock of work in progress and finished goods is done on the basis of
variable costs.
Profit is calculated by deducting the fixed cost from the contribution, i.e., excess of
selling price over marginal cost of sales.
Profitability of various levels of activity is determined by cost volume profit analysis.
3.3 ADVANTAGES OF MARGINAL COSTING
Cost-volume profit relationship data wanted for profit planning purpose is readily
obtained from the regular accounting statements. Hence management does not have to
work with two separate set of data to the other.

The profit for a period is not affected by charges in absorption of fixed expenses
resulting from building or reducing inventory. Other things reaming equal ( e.g.
selling prices, costs, sales mix)

Practical cost control is greatly facilitated .by avoiding arbitrary allocation sof fixed
overheads, efforts can be concentrated on maintaining a uniform and consistent
marginal cost useful to the various levels of management.

Marginal costing is simple to understand and operate; it can be combined with other
forms of costing such as, budgetary costing, standard costing without much difficulty.
In marginal costing fixed overheads are not charged to the cost of production due to
this the effect of varying charges per unit is avoided.

It helpsin short-term profit planning by break-even charts and profit graphs.
Comparative profitability can be easily assessed and brought to the notice of the
management for decision-making.

It prevents the illogical carry-forward in stock-valuation of some proportion of current
years fixed overheads.

It eliminates large balances left in overheads control accounts, which indicate the
difficulty of ascertaining an accurate overheads recovery rte.

Manufacturing cost and income statement in the direct costing is in use.
Shutdown or continue decisions or alternative use of production facilities.
Retain or replace a machine.
Decisions as to whether to sell in the export market or in the home market.
The effect of alternative sales or production policies can be more readily appreciated
and assessed, and decisions taken will yield the maximum return to the business.
Whether to expand or contract.
Product mix decisions like for example :
Selection of optimal product mix;
Page 37
Product substitution;
Product discontinuance.
Break-Even Analysis.
3.4 Limitations of Marginal Costing
It may be very difficult to segregation of all costs into fixed and variable costs.
Marginal Costing technique cannot be suitable for all type of industries. For example,
it is difficult to apply in ship-building, contract industries etc.

The elimination of fixed overheads leads to difficulty in determination of selling
price.
It assumes that the fixed costs are controllable, but in the long run all costs are
variable.
Marginal Costing does not provide any standard for the evaluation of performance
which is provided by standard costing and budgetary control.

With the development of advanced technology fixed expenses are proportionally
increased. Therefore, the exclusion of fixed cost is less effective.

Under marginal costing elimination of fixed costs results in the under valuation of
stock of work in progress and finished goods. It will reflect in true profit.
Marginal Costing focuses its attention on sales aspect. Accordingly, contribution and
profits are determined on the basis of sales volume. It does not consider other
functional aspects.
Under Marginal Costing semi variable and semi fixed costs cannot be segregated
accurately.
It is very difficult to segregate all costs into fixed and variable costs very clearly, since
all costs are variable in the long run. Hence such segregation sometimes may give
misleading results.
The closing stock consists of variable costs only and ignores fixed costs. This gives
distorted picture of profits.

Semi-variable costs are not considered in the analysis.
There is problem of under or over-recovery of overheads. Since variable costs are
apportioned on estimated basis and not on the actual.

Since the time factor is completely ignored; comparison of performance between two
periods on the basis of contribution alone will give the misleading results.
Page 38
3.5 COST VOLUME PROFIT ANALYSIS

Cost Volume Profit Analysis (C V P) is a systematic method of examining the relationship between
changes in the volume of output and changes in total sales revenue, expenses (costs) and net profit. In
other words. It is the analysis of the relationship existing amongst costs, sales revenues, output and
the resultant profit.
CVP analysis expands the use of information provided by break-even analysis. A critical part of CVP
analysis is the point where total revenues equal total costs (both fixed and variable costs). At this
break-even point, a company will experience no income or loss. This break-even point can be an
initial examination that precedes more detailed CVP analysis.
CVP analysis employs the same basic assumption as in breakeven analysis. The assumptions
underlying CVP analysis are;
The behaviour of both costs and revenues is linear throughout the relevant range of activity. (This
assumption precludes the concept of volume discounts on either purchase materials or sales)
Costs can be classified accurately as either fixed or variable.
Changes in activity are the only factors that affect costs.
When a company sells more than one type of product, the product mix (the ratio of each product to
total sales) will remain constant.
The components of CVP analysis are;
Levels or volume of activity

Unit selling prices
Variable cost per unit
Total fixed costs
To know the cost, volume and profit relationship, a study of the following is essential:
(1) Marginal Cost Formula
(2) Break-Even Analysis
(3) Profit Volume Ratio (or) PN Ratio
(4) Profit Graph
(5) Key Factors and
(6) Sales Mix
One of the main methods of calculating CVP is profit-volume ratio which is
(contribution/sales*100=this gives us profit-volume ratio.
Total costs = fixed costs + (unit variable cost*number of units)
Total revenue = sales price*number of units
A variable cost is one that is directly related to the levels of sales such as cost of goods sold and
commission.
Page 39
CIMAs defined as the study of the effects on future profit changes in fixed cost. Variable costs, sales
price, quantity and mix.
The cost-volume-profit (CVP) analysis helps management in finding out the relationship of costs and
revenues to profits the aim of an understanding is to earn profits. Profit depends upon a large number
of factors. The most important of which are the cost manufacture and the volume of sales effected.
Both these factors are interdependent-volume of sales depends upon the volume production. Which in
turn is related to costs? Cost, again, is the resultant of the operation of a number of varying factors.
Such factors affecting costs are;
1.
2.
3.
4.
5.
Volume of production
Product-mix
Internal efficiency
Methods of production; and
Size of plant; ect..
Analysis of cost-volume-profit involves consideration of the interplay of the
following factors;
1.
2.
3.
4.
Volume of sales
Selling price
Product mix of sales
Variable costs per unit
3.6 Objectives of Cost Volume Profit Analysis

The following are the important objectives of cost volume profit analysis:
(1) Cost volume is a powerful tool for decision making.
(2) It makes use of the principles of Marginal Costing.
(3) It enables the management to establish what will happen to the financial results if a specified level
of activity or volume fluctuates.
(4) It helps in the determination of break-even point and the level of output required to earn a
Desired profit.
(5) The PN ratio serves as a measure of efficiency of each product, factory, sales area etc. And thus
helps the management to choose a most profitable line of business.
(6) It helps us to forecast the level of sales required to maintain a given amount of profit at
Different levels of prices.
Marginal Cost Equation
The Following are the main important equations of Marginal Cost;
Sales = Variable Cost + Fixed Expenses Profit I Loss
(or)
Sales - Variable Cost = Fixed Cost Profit or Loss
Page 40
(or)
Sales - Variable Cost = Contribution
Contribution = Fixed Cost + Profit
The above equation brings the fact that in order to earn profit the contribution must be more than
fixed expenses. To avoid any loss, the contribution must be equal to fixed cost.
3.7 Contribution:
The term Contribution refers to the difference between Sales and Marginal Cost of Sales. It also
termed as "Gross Margin." Contribution enables to meet fixed costs and profit. Thus, contribution will
first covered fixed cost and then the balance amount is added to Net profit. Contribution can be
represented as:
Contribution = Sales - Marginal Cost
Contribution = Sales - Variable Cost
Contribution = Fixed Expenses + Profit
Contribution - Fixed Expenses = Profit
Sales - Variable Cost = Fixed Cost + Profit
C=S-V.C
C=F.C+P
S-V.C=F.C+P
C-F.C=P
1. Selling price containing profit:

Contribution = Fixed cost + Profit
2. Selling price at cost:
Contribution = Fixed cost
3. Selling price at loss:
Page 41
Contribution = Fixed loss
3.8 Break-Even Analysis:

Break-Even Analysis is also called Cost Volume Profit Analysis. The term Break-Even Analysis is
used to measure interrelationship between costs, volume and profit at various level of activity. A
concern is said to break-even when its total sales are equal to its total costs. It is a point of no profits
no loss. This is a point where contribution is equal to fixed cost. In other words, the break-even point
where income is equal to expenditure {or) total sales equal to total cost.
The break-even point can be calculated by the following formula:
Break-Even Point in Units
3.9 ASSUMPTION UNDERLYING BREAK-EVEN-ANALYSIS

The break-even-analysis is based on the following assumptions
1. The cost and revenues functions are linear functions. This is for the
2. Sake cost and of simplicity
3. The firm can estimate the cost and revenues in advance.
4. Price remains uniform as all levels of output
5. Selling price per unit does not change as volume changes.
6. Total fixed cost remains constant
7. There is synchronization between production and sales. In other words, volume
of production equal volume of sales.
8. All costs can be separated into fixed and variable components
9. Variable cost per units remains constants and total variable costs varies in direct
proportion to the volume of production.
10. The costs are made up of fixed and variable costs.
11. There is only one product or in the case of multiple products, the sales mix does
not change. In other words, when several products are being sold, the sale of
various products will always be in some predetermined proportion.
12. Productivity per worker does not change, and
13. There will be no change in the general price level.
3.9 STATEMENT OF PROFIT
Particulars
Sales
Less:-Variable cost
Contribution
Less:- Fixed cost
Profit
amount
***
***
***
***
***
Page 42
Sales = Total cost + Profit = Variable cost + Fixed cost + Profit
Total Cost = Variable cost + Fixed cost
Variable cost Ratio = {Variable cost / Sales} * 100
Sales Variable cost = Fixed cost + Profit
Contribution = Sales * P/V Ratio
3.10 PROFIT VOLUME RATIO [P/V RATIO]:The ratio or percentage of contribution margin to sales is known as P/V ratio. This ratio is
also known as marginal income ratio. Contribution to sales ratio. P/V ratio usually expressed
as a percentage is the rate at which profit increases with the increase in volume. The formula
for P/V ratio;
1. {Contribution / Sales} * 100
2. {Contribution per unit / Sales per unit} * 100
3. {Change in profit / Change in sales} * 100
4. {Change in contribution / Change in sales}
3.11 SIGNIFICANCE OF PROFIT VOLUME (P/V) RATIO

Profit volume ratio is a logical extension of marginal costing. It is study of the
interrelationship of cost behaviour patterns, levels of activity and the profit that result from
each alternative combination. The significance of profit volume ratio may enumerate from the
following application which are as under;
Page 43
Ascertainment of profit on a particular level of sales volume.

Determination of break even profit.
Calculation of sales required to earn a particular level of profit.
Estimation of the volume of sales required to maintain the present level of profit in
case selling prices are not to be reduced by as stipulated margin.
Useful in developing flexible budget for costs for decisions relating to pricing.
Keeping or dropping product lines. Accepting or rejecting particular order. Make or
buy decision, sales mix planning, altering plant layout, channels of distribution
specification, promotional activities etc..
Evaluation of the impact of costs factors on profit.
3.12 BREAK EVEN POINT [BEP]:1. Fixed cost / Contribution per unit [in units]
2. Fixed cost / P/V Ratio [in value] (or) Fixed Cost * Sales value per unit
3. (Sales Variable cost per unit)
3.13 APPLICATION OF MARGINAL COSTING

1. Profit planning
2. Evaluation of performance
3. Make or buy decision
4. Closure of a department or discontinuance of a product
5. Maintaining a desired level of profit
6. Offering quotation
7. Accepting on offer or exporting below normal price
8. Alternative use of production facilities
Page 44
9. Problem of key factor

10. Selection of suitable product mix
3.14 MARGIN OF SAFETY [MOP]
A principle of investing in which an investor only purchases securities when the market price
is significantly below its intrinsic value. In other words, when market price is significantly
below your estimation of the intrinsic value, the difference is the margin of safety. This
difference allows an investment to be made with minimal downside risk.
Margin of safety is a concept used in many areas of life, not just finance. For example,
consider engineers building a bridge that must support 100 tons of traffic. Would the bridge
be built to handle exactly 100 tons, probably not. It would be much more prudent to build the
bridge to handle, say, 130 tons, to ensure that the bridge wills no collapse under a heavy load.
MOS = budgeted sales break-even sales
Margin of safety is used in break-even analysis to indicate the amount of sales that are above
the break-even point
1. Actual sales Break even sales
2. Net profit / P/V Ratio
3. Profit / Contribution per unit [In units]
3. Sales unit at Desired profit = {Fixed cost + Desired profit} / Cont. per unit
4. Sales value for Desired Profit = {Fixed cost + Desired profit} / P/V Ratio
Degree of operating leverage
Operating leverage is determined by the firms sales revenue and its earnings before interest
and tax(EBIT). The earnings before interest and taxes called as operating profit(EBIT), while
financial leverage can be quite significance for the earnings available to ordinary
shareholders.
Financial leverage = EBIT/profit
Page 45
Operating leverages = contribution/EBIT

Combined leverages = contribution/EBT
Trends analysis
The income statement discloses net profit or net loss on account of operations. A comparative
income statement will show the absolute figures for two or more periods. The absolute
change from one period to another and if desired. The change in terms of percentages. Since,
the figure for two or more periods are shown side, the reader can quickly ascertain whether
sales have increased, whether cost of sales has increased or decreased ect..
Y=a=b(x)
Margin of safety is calculated as follows;
Margin of safety = total sales- break even sales
Margin of safety can also be calculated with the help of P/V ratio;
Margin of safety = profit/ profit volume
Margin of safety can also be expressed as percentage of sales;
Margin of safety/total sales*100
3.16 Profit Volume Ratio (P I V Ratio);
Profit Volume Ratio is also called as Contribution Sales Ratio (or) Marginal Income Ratio (or)
Variable Profit Ratio. It is used to measure the relationship of contribution, the relative profitability of
different products. Processes or departments. It also measures the rate of change of profit due to
change in volume of sales. Its fundamental property is that if per unit sales price and variable cost are
constant then P/V ratio will be constant at all the levels of activities . a change is fixed cost does not
affect P/V ratio.
3.18 Uses
of costs-volume-profit analysis
a) CVP analysis helps in forecasting costs and profits as a result of change in volume.
b) It helps fixing a sales volume level to earn or cover given revenue, return on capital
employed, or rate of dividend.
c) It assist determination of effect of change in volume due to plant expansion or
acceptance of an order, with or without increase in costs or in order or in other words
a quantum of profit to be obtained with changes in volume of sales.
Page 46
d) Through cost volume-profit analysis inter-firm comparison of profitability can be

done intelligently.
e) C.V.P analysis helps in determination relative profitability of each product line,
project or profit plan.
f) It helps in determining cash requirement at a desired volume of output, with the help
of cash break even charts.
g) Break even analysis emphasizes the importance of capacity utilization for achieving
economy.
h) From break even analysis during serve recession, the comparative effects of a shut
down or continued operation at a loss is indicated.
i) The effect on total cost of a change in the fixed over-head is more clearly
demonstrated through break-even analysis and cost-volume profit charts.
j) The condition of a business such as profit potentials, requirements of capital, financial
stability and incidence of fixed and variable costs can be gauged from a study of the
position of the break-even point and angle of incidence in the break-even chart.
3.18 margin of equation

Sales cost = profit
Or sales-(fixed cost variable cost) =profit
Or sales-variable cost = fixed cost profit
S-V =F-P
Where,
S=sales
V=variable
F=fixed cost
P=profit
Methods for determining break even points
The sales volume which equation total revenue with related costs and results in profit
or loss is called break-even point (BEP) break-even point can be determined by the following
methods;
1. Algebraic method
a. Contribution margin approach
b. Equation technique
2.
Graphic presentation
a. Break-even chart
b. Profit volume chart
Page 47
1. Algebraic method
a. Contribution margin approach
Break-even point (in units) = total fixed costs/selling price per unitvariable cost per unit
Or = total fixed costs/contribution per unit
Break-even point (in Rs) = fixed cost/ profit volume ratio
Or= break-even points (units)*selling price per unit
Page 48

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THE STUDY ON MARGINAL COSTING

1.1 INTRODUCTION ABOUT THE INTERSHIP

BGS INSTITUTE OF TECHNOLOGY

THE STUDY ON MARGINAL COSTING

costing in USA, this technique of costing is also known as

Differential costing or out-of-costing.

The third chapter theoretical background of the study it includes elaborative

THE STUDY ON MARGINAL COSTING

BGS INSTITUTE OF TECHNOLOGY

THE STUDY ON MARGINAL COSTING

To understand the financial position of the company

respect to Nandini hi-tech plant

To measures the degree of leverages with respect to Nandini hi-tech.

SCOPE OF THE STUDY

costing is only for 4years that is from 01/4/2011 to 31/3/2014.

To understand the importance of the determination of break-even-point with respect to

changes in sales and revenue.

THE STUDY ON MARGINAL COSTING

1.7 LITERATURE REVIEW

titled A PROJECT REPORT ON MARGINAL COSTING at BEVCON WAYORS.pvt.ltd

12.7% savings due to sourcing efforts based on spend analysis data

BGS INSTITUTE OF TECHNOLOGY

THE STUDY ON MARGINAL COSTING

9.1% reduction in manual correction of spend cleansed and classified

73% rate compliance to contractual agreement.

09 titled A PROJECT REPORT ON MARGINAL COSTING at Niranjan sugars.pvt.ltd

Raw material consumption is increasing. The increasing in sugar cane consumption

As prime cost of production are increasing in the firm exercise cost

THE STUDY ON MARGINAL COSTING

Reducing raw material usage in production down time.

BY SORIN BRICIUI, SORINEL CAPUSNEANU2

BGS INSTITUTE OF TECHNOLOGY

THE STUDY ON MARGINAL COSTING

cost structure. Although interpreted as technological progress, the time variable

1.8 LIMITATION OF THE STUDY

BGS INSTITUTE OF TECHNOLOGY

THE STUDY ON MARGINAL COSTING

performance of the company.

The study is conducted only on determination of marginal costing

It assumes that the fixed costs are constant

and produced are constant.

It assumes average variable costs are constant per unit of output.

2.1 INDUSTRY PROFILE

THE STUDY ON MARGINAL COSTING

Operation Flood Phase 1:

Operation Flood Phase 2:

Operation Flood Phase 3:

BGS INSTITUTE OF TECHNOLOGY

THE STUDY ON MARGINAL COSTING

It aimed at ensuring that the co-operative organizations become self-sustaining. This

To make available on request, information services to increase production

THE STUDY ON MARGINAL COSTING

World top 9 milk producing countries:

MILK PRODUCTION IN INDIA

THE STUDY ON MARGINAL COSTING

2.2 Company Profile:

Nandini Hi-Tech Product Plant

THE STUDY ON MARGINAL COSTING

KMF Nandini Hi-Tech Product Plant,

THE STUDY ON MARGINAL COSTING

Milk based powder & UHT Milk

Co-operative units include Private Agencies.

Milk, 3 lakh liters/day.