This document analyzes the cost sheet of Dabur India Limited for the fiscal year 2015-2016. It includes the preparation of the cost sheet, classification of costs into fixed and variable, and analysis using marginal costing tools. The analysis finds that variable costs account for 61.44% of total costs and the profit margin is 17% of net sales. The break-even point is Rs. 40,372 crores in sales and the margin of safety is 25% of actual sales.

1. 0
COST SHEET ANALYSIS: DABUR INDIA LIMITED.
Submittedby:Presented by:
Group 3 SectionB
Raj Singh Bhati (NMP62)
RohanTelang (NMP69)
Ruchira Das (NMP70)
SayanSengupta (NMP76)
Sumit Mathur(NMP85)
Swaraj Kumar Dhar (NMP87)
Pradeep Varshney (NMP93)

2. 1
Tables of Contents
Sr. No. Sub Sr. No. Topic Page No.
1
Acknowledgement
2
2
Objective
3
3
Dabur At-a-Glance
4
4
Costing
5
5
Assumption
6
6
Analysis of Cost Sheet
8
7
Contribution Cost Analysis
10
8
Contribution Costing Tools
11
9
Conclusion
13
10
References
14

3. 2
Acknowledgement
We are thankful to Prof. Rupa Manjari Sinha Roy 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.

4. 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 India Ltd. and studied its annual report FY2015-16.

5. 4
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. 55056 million (FY15-
16). 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.

6. 5
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. Of FY 2015-16 ,we have prepared the cost sheet.

7. 6
Assumption
We have assumed the following for the preparation ofcost sheet
 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.

8. 7
Analysis of Cost Sheet
We have collectedthe datafromcapital line website forouranalysis. Toppage of the P&L statementis
pastedhere.

9. 8
Contribution Costing Analysis
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 Millions
Employee Cost 3929
Depreciation Cost 659
Selling & Admin
Advertisement 6465
Other Expense 2197
Miscellaneous 2510
Tax 2043
Deferred tax 96
Fixed costs 18619

10. 9
Variable Cost
Raw Material 21598
Power & Fuel Cost 506
Other Manufacturing Cost 7561
Total Variable costs 29665
Total Cost 48284
 Advertisement expense constitutes about 34.72% i.e the company focuses more on
advertisements.
 Profit margin is 17 % of net sales.
 The total depreciation expense incurred during the year is Rs. 659million
 Overall deprecation constitute of 1.4 % of total cost of production.
All the expenses have been classified under two categories of cost:
 Fixed cost
 Variable cost
Fixed cost as a % of Total Cost 38.56
Variable cost as a % ofTotal Cost 61.44
 Major part of the expense is variable cost accounting to 61.44% while only 38.56% 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 38.56% is a comparably high value.

11. 10
 The company has invested a considerable amount in advertisement and publicity which accounts
to around 34.72 % of fixed cost.
 Expense on raw materialsconstitutes 72.80% of variable cost. This depends mainly on the
market demands as well the capacity of production.

12. 11
Contribution Cost Tools
Working Notes
Sales (S) 55056
Fixed Cost (FC) 18619
Variable Cost (VC) 29665
Contribution (S-VC) 25391
P/V Ratio 0.461182
Particulars Formula Calculation Result
Break Even Sales(in
Rs. Crores) Fixed cost/(P/V ratio) 18619/0.461182 40372
P/V ratio
(Contribution / Sales
)*100 25391/55056 0.461182
Margin of safety Actual Sales - BEP(Rs) 54312-40372 13580
Margin of safety
Ratio
(Margin of Safety /Actual
Sales)*100 13580/54312 25.00

13. 12
Supposethe company expects a profit of Rs. 100000 million for the next financial
year
Column1 Column2
Desired Profit 27358
P/V Ratio 0.488146258
Fixed Cost 18619
Desired sales 100000

14. 13
Conclusion
Analysis ofmarginal costing
 Margin of safety is an advantage to the company. It indicated the extra profit the company earns
over the breakeven point.Dabur’s MOS is 25% which is low. This means that the firm will earn less
profits if there is a slight fall in production or sales.This also contributes to a high angle of incidence
 BEP sales is Rs.40372 crores which is extremely low in comparison to current sales (Rs.55056
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.27358it has to impove its sales by Rs.100000
crores.

15. 14
References
 Mejorada, Nenita D., Business Finance and Philippine Business Firms. 2006.
 A Framework for Management –Gary Dessler
 Dessler,Gary, A Framework for Management
 Math Lover Hub Pages. Even Point Analysis. http://mathslover.hubpages.com/hub/Breakeven-
analysis
 http://www.tutor2u.net/business/production/break_even.htm
 http://connection.cwru.edu/mbac424/breakeven/BreakEven.html
 http://www.dinkytown.net/java/BreakEven.html
 http://office.microsoft.com/en-us/templates/TC011165121033.aspx