Amul Cost Sheet

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Amul Cost Sheet

  1. 1.
  2. 2. HISTORY<br />Amul ("priceless" in Sanskrit. The brand name "Amul," from the Sanskrit "Amoolya," (meaning Precious)formed in 1946, is a dairy cooperative in India. It is a brand name managed by an apex cooperative organisation, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF)<br />The Gujarat Cooperative Milk Marketing Federation Ltd, Anand (GCMMF) is the largest food products marketing organisation of India.<br />
  3. 3. In 1997, Amul ice creams entered Mumbai followed by Chennai in 1998 and Kolkata and Delhi in 2002. <br />The portfolio consisted of impulse products like sticks, cones, cups as well as take home packs and institutional/catering packs.<br />It achieved the No 1 position in the country. This position was achieved in 2001 and it has continued to remain at the top. <br />
  4. 4. Today the market share of Amul ice cream is 38% share against the 9% market share of HLL (Kwality Walls), thus making it 4 times larger than its closest competitor.<br />Not only has it grown at a phenomenal rate but has added a vast variety of flavours to its ever growing range.<br />In January 2007, Amul introduced SUGAR FREE & ProLifeProbiotic Wellness Ice Cream, which was a first in India. <br />
  5. 5. Amul’sentry into ice creams is regarded as successful due to the large market share it was able to capture within a short period of time – due to price differential, quality of products and of course the brand name.<br />
  6. 6. FACTS<br />The portfolio consisted of impulse products like sticks, cones, cups as well as take home packs and institutional/catering packs.<br />In 1997, Amul ice creams entered Mumbai followed by Chennai in 1998 and Kolkata and Delhi in 2002. Nationally it was rolled out across the country in 1999. <br />
  7. 7. Has combated competition like Walls, Mother Dairy and achieved the No 1 position in the country.<br />Today the market share of Amul ice cream is 38%.<br />Amul’s entry into ice creams is regarded as successful due to the large market share it was able to capture within a short period of time.<br />
  8. 8. Ice Cream Industry in India<br />Industry Snapshot:- <br />Market Size - 1200 Crores<br />Ice Cream market is growing at 26% <br /> <br />Major players:-<br />Amul - Market Leader with share of 36% <br />HLL - Kwality Walls - 2nd biggest player <br />Mother Diary <br />Arun - Chennai Based Hatsun Agro Product<br /> <br />Few Brands/ Target Consumers <br />1. Youth Centric - Chillz<br />2. Kids - Moo <br />3. Teenagers - Cornetto<br />4. Health Conscious - Amul Sugarfree & Pro-Life <br />
  9. 9. COST SHEET<br />Particulars CPU Amount <br />1000000<br />300000<br />250000<br />300000<br />350000<br />200000<br />250000<br />150000<br />100000<br />50000<br />100000<br />150000<br />3200000<br />184500<br />3384500<br />10<br />3<br />2.5<br />3<br />3.5<br />2<br />2.5<br />1.5<br />1<br />0.5<br />1<br />1.5<br />8<br />1.845<br />33.845<br />Opening Stock<br />Raw Materials<br />Dry Fruits<br />Milk<br />Flavours<br />Other Ingredients<br />Sugar<br />Cup<br />Cutlery<br />Seasonal Fruits<br />Waffle<br />Cocoa <br /> <br />Carriage Inward<br />RAW MATERIAL CONSUMED<br />
  10. 10. Particulars CPU Amount<br />Direct Expenses <br />Direct Labour<br />PRIME COST<br /> Factory Overheads: <br />Fixed:<br />Depreciation <br />Rent <br />Power <br />Insurance <br />Supervisor’s Salary<br />Variable:<br />Electricity <br />Running exp of machine<br />WORKS COST<br />2.2<br />5.3<br />40.045<br /> <br /> <br /> <br />2.5<br />1<br />1.75<br />1.5<br />0.6<br /> <br />0.7<br />1<br />9.05<br />50.395<br />220000<br />530000<br />4134500<br /> <br /> <br /> <br />250000<br />100000<br />175000<br />150000<br />60000<br /> <br />70000<br />100000<br />905000<br />5039500<br />
  11. 11. Particulars CPU Amount<br />Office Overheads<br />Employee Cost<br />Other Expenditure:<br />Computer <br />Telephone<br />Taxes<br />Carriage Outward<br />COST OF PRODUCTION<br /> <br />Opening Stock<br />-Closing Stock<br />COST OF GOODS SOLD<br />10<br />1.2<br />0.1<br />0.4<br />0.2<br />62.295<br /> <br />2<br /> <br />64.295<br />1000000<br /> <br />120000<br />10000<br />40000<br />20000<br />6229500<br /> <br />200000<br /> <br />6429500<br />
  12. 12. Particulars CPU Amount<br />Selling&DistExps:<br />Advertisement<br />Delivery Vehicles<br />Petrol <br />Packaging Rates<br />COST OF SALES<br /> <br />PROFIT<br /> <br />SALES<br />4<br />3.5<br />1.75<br />0.505<br />74.05<br />18.5<br />92.5625<br />400000<br />350000<br />175000<br />50500<br />7405000<br /> <br />1851250<br /> <br />9256250<br />
  13. 13. MARGINAL COST SHEET<br />9256250<br /> <br />3200000<br />3384500<br />2671750<br /> <br />905000<br />1000000<br />100000<br />190000<br />476750<br />SALES<br />Variable Cost:<br />Purchases <br />RM Consumed<br />CONTRIBUTION<br /> - Fixed Cost<br /> Factory Expenses<br /> Employee Cost<br /> Depreciation <br /> Other Expenditure<br />PROFIT<br />
  14. 14. COST SHEET ANALYSIS<br />The company is producing 100000 units of ice cream at Rs. 74.05 for which the total cost incurred is Rs. 7405000 and the total sales is Rs. 9256250 which implies that that the profit being made is Rs. 1851250. <br />The company is producing a single cup of ice cream at Rs. 92.5625 which includes the cost of a cup ice cream at Rs. 74.05 which again implies that the profit of Rs. 18.5125 is earned on a single unit of Amul ice cream.<br />
  15. 15. Since the company is earning some percentage of profit above the cost, it means a slight increase in the cost will not have too much of an effect on the profit since there is a large margin of safety.<br />Since the company is earning some amount of profit, the business is capable to expand and diversify over a period of time. <br />
  16. 16. PVR = C/S = 2671750/9256250 = 28.86%<br />BEP (in Rs.) = FC/PVR = 2195000/28.86 = Rs.760568.26<br />BEP (in units) = FC/C = 2195000/2.67175 = 821558.9 = 821559<br />MOS = Profit/PVR = 476750/28.86 = 16519.404<br />
  17. 17. Determination of SP<br />Amul Ice Cream has marked the selling price of their product roughly 20% above the cost price.<br />This implies that they are making a profit on each unit of output that is sold.<br />These profits can be ploughed into the business again to create more output.<br />
  18. 18. THANKYOU<br />

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