5. • Scope of Activity: The dairy products will be available daily for
85000 residents in manipal.
• Production Capacity = 15KL of milk per Annum
• Budgeted Capacity = 12KL of milk per Annum
*Assuming per capita consumption= 200ml/day
• Budget Period: Month of January, 2013-14
6. • Factory Costs: Fresh Milk, Employees, Power etc
• Administrative Costs: Supervisor Salaries etc
• Selling and Distribution Costs: Refrigeration costs, Transportation etc.
7. DIVISION OF COSTS:
S.NO Cost Heads Direct/Indirect Fixed/Variable
1No of Employees I F
2Plant Rent I F
4Electricity Charges I V
5Packaging Cost D V
6Insurance Expenses D F
7Refrigeration I F
8Transport I F
9Canteen I F
10Security Expenses I F
11Salaries to contract employees D F
12Telephone Expenses I V
13Advertising Cost I F
14Stationary Expenses I F
10. Department Info
Milk Collection Pre-processing Processing Storage Power Maintenance
Number of
20 10 30 15 10 15
Employees
Area occupied 1200 1200 8000 5000 2000 2000
No. of Machines 5 10 15 20 5 5
Value of Machines
1 2 7.5 4 5 2.5
(in lakhs)
No. of light points 10 15 30 25 5 10
HP of Machines 2 10 15 10 1 1
Machine Hours 120 180 180 720 300 300
11. Overheads and Cost base
Cost Center Base Ratio
Rent Area occupied 12:12:8:5:2:2
Insurance Value of Machines 2:4:15:8:10:5
Lighting No. of light points 2:3:6:5:1:2
Supervisor Salaries Number of Employees 4:2:6:3:2:3
Depreciation Value of Machines 2:4:15:8:10:5
Maintenance and Repair Machine Hours 2:3:3:12:5:5
Electricity HP of Machines 2:10:15:10:1:1
Employee Welfare Expenses Number of Employees 4:2:6:3:2:3
Security Expenses Value of Machines 2:4:15:8:10:5
14. TIME TAKEN BY A PRODUCT IN EACH DEPT.
Milk Collection Preprocessing Processing Storage
Milk
6 6 3 2
Butter
6 5 4 3
Cheese
6 4 6 3
Powdered Products
6 3 2 1
Sour Milk
6 2 5 2
Cream
6 1 4 3
15. Indirect Cost Direct
No. of units Total Cost Selling
Absorption into Cost per unit cost per Profit
produced per unit Price
product unit
Milk 1000 8724.474155 8.724474155 10 18.72447 27 8.275525845
Butter 800 9230.013567 11.53751696 15 26.53752 35 8.462483041
Cheese 800 10403.89368 13.0048671 15 28.00487 40 11.9951329
Powdered
Products 750 6441.289976 8.588386635 12 20.58839 35 14.41161336
Sour Milk 1000 8565.120693 8.565120693 10 18.56512 22 3.434879307
Cream 650 7452.368801 11.46518277 17 28.46518 42 13.53481723
16. ACTIVITIES INVOLVED
Activity Cost Driver
No. of hours to reach the
Cooling in Van plant
Transportation No. of working days
Checking for Quality No. of Checks
Quantity Verification No. of Checks
Filtration Machine hours
Refrigeration Refrigeration Hours
Clarification(Centrifuge) Machine hours
Pasteurization(Heating and
instant cooling) Machine hours
Homegenization(uniformity of fat) Machine hours
