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1. COST SHEET ANALYSIS: DABUR
INDIA LIMITED.
Submitted by:
ElizabathEappen( F11076)
NeethuThresaJacob(F11096)
Swarupa Rani Sahu(F11116)

2. 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)

3. 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 IndiaLtd. 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 over2.8 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.

4. 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.

5. 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
Administrative OH as a % of works cost 11.14
Selling OH as a % of Cost of production 29.71
The total depreciation expense incurred during the year is Rs. 3496 crores out of which Rs. 2118
crore is towards plant and machinery and Rs.170 crore is only for office furniture and fixtures.
Depreciation on Plant and machinery is 71.18% of depreciation on factory assets
Overall deprecation constitute of 1.98 % of total cost of production.

6. MARGINAL COSTING
Marginal costing is the ascertainment ,by differentiating between fixed cost and variable cost of marginal
costs and of the effect on profit of changes in volume or type of output.
It is not a system of ascertaining cost but a special technique which is concerned with the changes in costs
resulting from the changes in volume or range of output.
The technique of marginal costing involves:
Differentiation between fixed cost and variable cost
Ascertainment of marginal costs
Ascertaining the effect on profit due to changes in volume i.e cost volume profit analysis.
Tools of marginal costing:
Contribution
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

7. Auditor's Remuneration 76
General Expenses 9201
Security 446
Insurance 286
Director's Fee 2192
Telephone and Fax 355
Legal and Professional 2159
Repair and Maintenance Building 281
Processing charges 2098
Other Repairs 678
Rent 2132
Advertisement 39019
Total Fixed costs 63135
VARIABLE COST
Repairs To Machinery 423
Direct Labour 18000
Raw Material 77335
Primary Packing Material 50071
Power and Fuel 4239
Stores and Spares 1172
Excise Duty 3099
Sales tax 289

8. Freight and forwarding 6287
Travel and Conveyance 3007
Commission and Discount 3166
Total Variable costs 167088
Total Cost 230223
All the expenses have been classified under two categories of cost:
Fixed cost
Variable cost
Fixed cost as a % of Total Cost 27.423
Variable cost as a % of Total Cost 72.575
Major part of the expense is variable cost accounting to 27.423% while only 27.423% is fixed
cost. That means if variable cost per unit is controlled to some extent then cost can be controlled.
Though fixed cost seems to be low when compared to variable cost it is also an indication that
company has invested well in fixed assets as 27.423% is a comparably high value.
The company has invested a considerable amount in advertisement and publicity which accounts
to around 63.13% of fixed cost
Expense on raw materials and primary packing material together constitutes 76.25% of variable
cost. This depends mainly on the market demands as well the capacity of production.

9. Calculation of Marginal Costing Tools
Particulars Formula Calculation Result
Break Even
Sales(in Rs. Fixed cost/(P/V
Crores) ratio) 129336.24
(Contribution /
P/V ratio Sales )*100 3737.91/16910.06 0.48815
Margin of Actual Sales -
safety BEP(Rs) 16910.06-3032.036 197100.76
(Margin of Safety
Margin of /Actual
safety Ratio Sales)*100 13878.02/16910.06 60.38
Working Notes
Sales 326437
Fixed Cost 63135
Variable Cost 167088
Contribution 159349
P/V Ratio 0.488146258

10. Suppose the company expects a profit of Rs. 150000 crores for the next financial
year
Column1 Column2
Desired Profit 150000
P/V Ratio 0.488146258
Fixed Cost 63135
Desired sales 436621.1899
ANALYSIS OF MARGINAL COSTING
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.